This seems like a difficult business to execute on.
1) You need capital to buy the machines to give out and slowly collect $60 on. Once the capital runs out, more is needed, but without getting capital quick enough, new customers have to be turned down, growth slows, and capital becomes even more difficult to acquire.
2) Since the tech and product can be easily purchased by anyone, there is room for other businesses to enter the space quickly and drive a pricing war. If large chains got involved they could offer a lower price and push local same day service.
3) Machines break. Without a hassle-free return / warranty, customers will likely get frustrated, refuse to pay, and make collections very difficult.
Not to say it can't be done, the leasing industry is fairly large, but I'd thought I'd share my thoughts on the problems that might arise. Reminds me of when they did PCs for 19.95 a month plus internet for a contract term.
There are much bigger, fundamental problems with the computer rental business. Key amongst them is the selection bias involved with "renting" anything with a relatively low purchase value.
While consumers frequently make poor financial decisions, most are able to identify that renting is going to be more expensive over the long run, thus consumers prefer to buy outright, or to use credit financing that results in ownership, even if the terms of said financing are poor (e.g., using a credit card to buy a laptop). In a given population of consumers, the ones that are going to choose the rent option either do not have the credit available to use the finance-to-buy option, or simply don't have the means to make the payment that would be required with traditional financing.
I worked for a rent-to-own company (Curtis Mathes) in the 90's, so I have some experience in the space. Overwhelmingly, Curtis Mathes' customers were people who could not get credit otherwise. They couldn't get credit otherwise because they made devastatingly bad financial decisions. When you rent low-dollar items like $1,000 living room sets, this is the customer you get. Renting MacBooks is frighteningly familiar.
If I were Technichi, this is the ball I'd keep my eye on. Curtis Mathes faced tremendous challenges that non-rent-to-own companies only see as a small blip. For example, one of the biggest problems at our location was first-payment-default. A customer would take home a full set of furniture on a promotion such as "$1 pays your first week's rent", then never make another payment. Delivery staff would pick up the furniture, which would often go straight in to the dumpster because the delinquent customer had trashed it.
When you cater to the "Oh, I can afford $XX a month!" crowd, these are the problems you have to solve.
In regards to (1), they can lease/finance them. As long as the $60 includes enough gross margin, and as long as they have enough borrowing capacity, they don't need $2000 * X laptops to start up.
Seems like a good relationship with their financing partner would be key.
A brand new kia or scion is gonna be faster out the gate and cheaper than a 4 year old cadillac.
But the cadillac wins on looks, power, durability, safety, fuel, utility, terrain/environmental performance, can hold more people and those new cars won't have interiors half as nice on their new models 4 years from now as today's 4 year old cadillac model does.
Oh and if the race is longer than 30-40 yards that caddie will catch up and smoke those cars with it's V8.
But the real improvement is battery life. Intel Haswell machines are lasting 10 to 16 hours now, and this number will only improve as Intel moves to 14nm and 10nm designs.
Computers aren't getting faster because no one cares about that. The majority of the design effort is now into battery life. A Dell Venue 8 Pro lasts 8+ hours on a single charge, on a tiny 20Whr battery (while being faster than the 4-year-old Macbook Pro). The 4-year-old Core2Duo Macbook Pros lasted only a couple of hours on behemoth 60Whr batteries.
Battery efficiency will matter when it comes down to lightness and style. Better battery efficiency will lead to thinner, sleeker, lighter designs. Generally speaking, the "progress" of modern computers is battery efficiency, leading to smaller batteries, leading to lighter and smaller computers.
Then get the $300 Asus Vivotab Note, instead of spending $60/month on a lease on a new laptop. Within 6 months, you'll have made your money back and then some (Especially since the $300 tablet can do everything a 4-year-old computer can do, while having superior battery life, significantly less weight, support of a Wacom Active Stylus and a touchscreen)
Yes, I have run Photoshop and Gimp on a $300 Baytrail Tablet. Yes, they work. I can personally verify that fact. On the other hand, I do notice significant performance increases when comparing these cheap, tiny computers against my beefy Desktop. Regardless, I speak from experience.
Benchmarks do not lie however, these $300 Baytrail tablets are faster than Macbook Pros from 4 years ago.
Regardless of how you slice it, computers depreciate significantly faster than cars. For those where "just enough" performance is good enough, you might as well buy these modern $300 netbooks / tablets than lease a top-of-the-line laptop for $60/month... unless you really throw away your laptops after less than 5 months of usage.
A brand new cheap computer is better than a top-of-the-line computer from 4 years ago. And for those who are chasing the top end, modern premium computers are released too often for this lease business model to make sense IMO.
I'm thinking of the typical car vs the typical computer.
>> New cars typically lose about 20% of their value the moment they’re driven off the lot, and about 65% after five years.
MBPs are one of the few computers that hold their value the best. But after 5 years, you're looking at a depreciation rate of 75%+ (going from $2000+ in 2009 to only $500 in 2014).
But we're looking at the _best_ computer that holds its value the best. No one gives a damn about a refurbished Dell Inspiron from 2010.
You're looking at ~90% depreciation for the more typical laptop, and maybe 70% if you focus only on Macbooks. With Cars, you're looking at 65% typical depreciation, with only ~45% if you focus on Camrys or Corolas.
A 2009 Camry will run you ~12k today, only 45% depreciation.
You were downvoted for saying exactly what I was about to say: for most consumer use, my 2009 MBP does everything I need. It beats me at chess. A/V transcoding could be faster, but that's really an edge use case for me, and probably most people, even on HN.
What I do care about is ergonomics, specifically the keyboard, and I have yet to find a $300 (or $600) Windows or Android machine with a keyboard comparable to a Mac. If it exists, I hope someone will let me know in the comments.
This is a thread about how computers get better over the years. A modern Macbook Pro is leagues better than one 2 years ago (SSD, PCIe, Retina Screen, smaller), and the one 2-years-ago is leagues better than a 4-year-old Macbook Pro (Sandy Bridge vs C2D, GPU upgrades, etc. etc.).
I chose the Dell Venue 8 Pro because it is a cheap $300 machine to emphasize a point. Computers continue to make progress exponentially... to the point where a 4-year-old "premium computer" is specs-for-specs comparable to one of the trashiest, slowest modern computers of this time.
I'm a little pissed that I have to change my argument structure to cater to your fanboy mindset. I'm not taking a dig at Mac, I'm trying to make a point about technology and the rate at which it improves.
Long story short: the computer industry has always been about forward progress at an exponential rate. This will make it difficult for any "leasing" structure to work with computers. Depreciation of laptops happens too quickly.
I'm trying to make a point about technology and the rate at which it improves.
Make whatever point you want, but TFA is about an MBP subscription service. People buy MBPs for usability and reliability, not for hardware specs. Always have.
When you claim that one computer is "leagues better" than some other computer, I say "prove it - according to MY criteria as the purchaser and consumer - not your criteria as a chip overclocker."
I don't have to drive if I don't have to. If I want to drive I can lease a car for a few hours or a few weeks. I don't have to change the car's interior. I don't need to install new software to match my taste. I pick up the key, unlock the car and I am ready to go on the road. I put all my personal accessories under a bucket so when I return I know I have everything in the bucket and ready to go home.
I may need a spare laptop for a day or two. But I have to download the software over again and again. I use Firefox, but I also need Chrome. I need to download Adium as IRC client. I need thunderbird to be my email client. I need iterm2 to be my terminal. I need to set up a bunch of things. When I return I need to make sure I have the laptop restored to factory state. But I am paranoid some data maybe kept secret? What if the computer comes with malware already?
If I need a Mac computer to do testing, this business is great. When I am done testing I can return the machines.
One business model has worked for a long time and the other has failed a lot. Haha, maybe that statement itself is not very correct though considering the car industries recent history.
I think you've started a very interesting discussion here with you're comment. The 10x cost reference was a good point, but computers not dropping value over time also seems more feasible.
One of the big drivers for car leasing is tax policy. From my cursory understanding, you can generate bigger short-term, tax-deductible business expenses with a lease than a purchase.
Since computers presumably depreciate faster than cars, the benefit is probably smaller for computers.
The devil will be in the details. The Apple lease program to me isn't interesting because a) the minimum lease term is 24 months and b) the minimum order is $3,000.
If I have an option to subscribe on 6-12 month terms and upgrade my machine on each release cycle, that'd be really interesting.
You'll pay for a shorter lease term with a much higher monthly payment. Depreciation isn't linear; both a car and a computer will lose value much faster during the first 6 months than during the second 6 months (much less months 12-18.) So if you lease for say, 6 months rather than 24, the rate has to reflect that higher depreciation (plus the risk and cost associated with reselling the item at the end of the lease, spread over a much smaller number of periods.) I could easily see it costing double the rate Apple charges for a 24 month lease to rent for 6 months.
Example: $2000 machine that depreciates to $1500 after 6 months, 1200 after 12 months, $800 after 24 (keep in mind much of the value loss happens when you "drive it off the lot" and turn it from new into used). $100 overhead on accepting the return, cleaning it up and reselling it to extract that value.
6 mo lease: ($2000 - $1500 + $100) / 6 mo = $100/mo
12 mo lease: ($2000 - $1200 + $100) / 12 mo = $66/mo
24 mo lease: ($2000 - $800 + $100) / 24 mo = $50/mo
(Yes, I"m ignoring interest here. But rates are low.)
I think that Technica could differentiate if it allowed you to quickly scale up and down to match your hardware needs. Long term leases can be hard to escape.
They don't emphasise or even mention this as a feature on their site though.
I recently applied for a lease for a relatively new business that has been pretty profitable in a short time and got rejected. The Apple rep wouldn't tell us why. Will definitely be trying this service out.
Am I the only one who thought April fools? I could actually see this being useful if I was considering buying a new Mac as a way to test out different models for an extended period of time assuming I could get a one month lease.
Honestly Chrome is the worst. I'll have 10-12 tabs open (including apps like Asana and Gmail, plus a few extensions) and it takes a while to switch tabs, especially when I'm also doing development work, with Atom open, a few iTerm tabs, Activity Monitor, Finder windows, Messenger, Telegram, and Mail. Add a few daemons for servers or databases running in the background it just locks my system up.
Plus I work with data sets, and my HDD is filling up fast...
This page really needs to specify the length of the term, otherwise something like $60/month is pretty meaningless when trying to figure out if something like this would be worth the cost of convenience.
I really hope this is real. There have been a couple of occasions where I've been waiting for a 'big leap' in Apple's annual hardware refresh, but circumstances have dictated that I need a new computer right now[1]. Being able to simply rent a laptop for a couple months would be killer.
[1] Specifically what's happened to me in the past is that I left a job and had to return my work laptop, and in another instance someone dropped a pint of beer onto my laptop.
This could be great for businesses. To pay $60 for a machine for 2 years (for example) means a total cost of $1440. If this service includes something like an 'instant repair', i.e. they just send you a new one and take care of repairs, so that you aren't ever without a machine, it could be worth the slightly higher cost. Also, most companies will want upgrades/replacements every 2 years anyway, so this way they get that, don't need to worry about what to do with an old machine, which they probably wouldn't sell anyway.
I goto school with a lot of people who would jump all over this. If the credit requirement's aren't crazy and students could easily get approved, this could be a game changer. I'm assuming it's going to be a 1 or 2 year term and they are relying on the high resale value once you send it back to profit or re rent the old systems for a lower price.
First Guess: Doesn't show up on your credit (or require great credit)
Second Guess: There are different tax ramifications for renting something than there are for purchasing/financing.
When you purchase a computer I think you can only write of a certain amount (maybe depreciation?) as a business expense, whereas this entire $60/mo is a business expense.
This service has been existing in Europe for a while. It’s not nearly as polished, though.
Yes, it requires a initial investment, but with a big insurance (fraud is rampant and breakage astounding) a bank would be happy to pay against easily re-sold inventory.
The key differentiating factor is the minimum rental time: you can offer any period, but One-day rentals require a different logistic than a year.
I would personally love to see a meaningful One-week option because my MBAir needs new batteries, and I can’t imagine stepping away from it more than a day. If Apple could afford that through its Official Repair Partner, I’d be a happy man.
Here's a question: when you return the computer, will they review its condition for damage / mileage, the way a car dealer would for a lease return? And if not, what's the incentive to take care of it?
I hope that they offer next day replacement machines. As it is now, when my laptop dies, I go to the Apple store, they say it will take a week to repair so I buy a new one on the spot. I later get the old one fixed and give it to my son as a hand-me-down. I've done that twice now, but it isn't the most predictable way to always have a Macbook.
It would be kind of cool to be able to get a replacement machine by FedEx the next day, and stay current on my hardware. (They tend to last a bit longer than 2 years).
That would be especially compelling if they integrated backups as well. You get your laptop back, including all the data from the last full-disk backup.
Of course, security. Perhaps encrypt the drives by default, then backup snapshots of the encrypted data? Then you get the benefit of the backup without the privacy hole.
I call April fools: none of the models they advertise support the "upgrade" to 1TB magnetic hard drive, which they list in optional upgrades. When was the last time you saw a magnetic hard drive with PCI Express interface? :-)
Just heard of a MacBook rental company Livyy from Khoi Vinh. Looking for something more my price range and came across Technichi. Love the price and the idea, but, are any of you fearful this might still be a joke?
Would one get new stuff when the old gets outdated?
If yes, what would you do with the old hardware? Who want's the old stuff then?
If not, is there any point other than your support for the consumer?
Low credit limit? Credit's not that great? Incremental hardware upgrades? (60/month for a year is $720 and I can upgrade to the latest and greatest machine for the same price)
Nothing to argue with there. I was primarily pointing out that this company is addressing a problem that doesn't really exist in the first place. Financing for consumer purchases is readily available, and if you have bad credit you probably shouldn't be leasing a Mac for "less than your monthly cell phone bill" (nor should you likely have a cell phone bill over $60 per month...)
>if you have bad credit you probably shouldn't be leasing a Mac for "less than your monthly cell phone bill" (nor should you likely have a cell phone bill over $60 per month...)
That doesn't necessarily follow.
This is actually the boat I'm in right now. Medical bills + no real work for 1.5 years = Credit history is garbage for at least 4 more years until it falls off my report. Sure, it's paid off now, and the report reflects that, but the people and algorithms who just look at the number don't know and don't care how or why.
Practically, I could either stack up the roughly $1500 necessary to outright buy a machine and have only AppleCare, or I could just pay $60/month and have a fully covered machine that's functionally immune to both breakage and hardware updates.
(Or I could pay $200 a month to a sketchy "we rent to people with shit credit" outfit and gain all of the headache with none of the benefit)
I know which particular equation I like more...
Aside, People really need to stop basing assumptions of people's behavior on their credit score, and that goes double with the economic downturn of the past few years.
1) You need capital to buy the machines to give out and slowly collect $60 on. Once the capital runs out, more is needed, but without getting capital quick enough, new customers have to be turned down, growth slows, and capital becomes even more difficult to acquire.
2) Since the tech and product can be easily purchased by anyone, there is room for other businesses to enter the space quickly and drive a pricing war. If large chains got involved they could offer a lower price and push local same day service.
3) Machines break. Without a hassle-free return / warranty, customers will likely get frustrated, refuse to pay, and make collections very difficult.
Not to say it can't be done, the leasing industry is fairly large, but I'd thought I'd share my thoughts on the problems that might arise. Reminds me of when they did PCs for 19.95 a month plus internet for a contract term.