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.
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.
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.
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?
[+] [-] nickconfer|12 years ago|reply
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.
[+] [-] auctiontheory|12 years ago|reply
That is a very generic argument that applies to (against) any leasing business - but clearly many such businesses exist, across many industries.
[+] [-] bradleyland|12 years ago|reply
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.
[+] [-] techwatching|12 years ago|reply
Seems like a good relationship with their financing partner would be key.
[+] [-] dman|12 years ago|reply
[+] [-] herpy|12 years ago|reply
[+] [-] psychometry|12 years ago|reply
[+] [-] zrail|12 years ago|reply
http://store.apple.com/us_smb_78313/browse/finance/lease
[+] [-] malbiniak|12 years ago|reply
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.
[+] [-] tdaltonc|12 years ago|reply
They don't emphasise or even mention this as a feature on their site though.
[+] [-] sdnguyen90|12 years ago|reply
[+] [-] jyothepro|12 years ago|reply
[+] [-] nobodyshere|12 years ago|reply
[+] [-] jareds|12 years ago|reply
[+] [-] bsima|12 years ago|reply
[+] [-] chrisrhoden|12 years ago|reply
[+] [-] nickconfer|12 years ago|reply
[+] [-] zecho|12 years ago|reply
[+] [-] aaronbrethorst|12 years ago|reply
[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.
[+] [-] danpalmer|12 years ago|reply
[+] [-] dwild|12 years ago|reply
[+] [-] Nk26|12 years ago|reply
[+] [-] adamnemecek|12 years ago|reply
[+] [-] askbill|12 years ago|reply
[+] [-] Dirlewanger|12 years ago|reply
[+] [-] chrisrhoden|12 years ago|reply
It's real.
[+] [-] techwatching|12 years ago|reply
[+] [-] philmcc|12 years ago|reply
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.
[+] [-] bsima|12 years ago|reply
[+] [-] bertil|12 years ago|reply
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.
[+] [-] tomkarlo|12 years ago|reply
[+] [-] cschmidt|12 years ago|reply
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).
[+] [-] edraferi|12 years ago|reply
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.
[+] [-] crawdog|12 years ago|reply
[+] [-] mehrdada|12 years ago|reply
[+] [-] steele|12 years ago|reply
[+] [-] ladiesman217|12 years ago|reply
[+] [-] callesgg|12 years ago|reply
[+] [-] ewang1|12 years ago|reply
[+] [-] killion|12 years ago|reply
I do hope they offer the high-end 15" Retina config even though it is not mentioned on the homepage.
[+] [-] rebelidealist|12 years ago|reply