[nickconfer]

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.

[auctiontheory]

You need capital to buy the machines to give out and slowly collect $60 on

That is a very generic argument that applies to (against) any leasing business - but clearly many such businesses exist, across many industries.

[bradleyland]

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.

[techwatching]

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.

[dman]

In your opinion what is the difference between leasing a computer and leasing a car?

[al2o3cr]

Off the cuff, cars cost 10x as much and aren't obsoleted by better cars that drive 3x as fast after two years...

[yeukhon]

I find some huge difference as a user.

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.

[nickconfer]

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.

[ef4]

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.

[herpy]

I expect they have an exit strategy: Apple buys them and uses their expertise and client base to kick-start this as a direct service.

[psychometry]

Also, you'll get no bulk pricing discount from Apple.