Paying Up Front is a Legacy Concept

Last week Apple announced that they were taking a step towards a subscription model around the iPhone.  Rather than paying upfront for the hardware, you pay each month and get access to iPhone as a product — effectively whatever is the ‘best’ version of the product at any given moment.

This is thematically quite consistent with what is going on all across the economy.  Software isn’t shrink-wrapped anymore: instead you pay subscriptions for things like Photoshop and the Office Suite. Paying for personal transportation once meant buying a car, although for the last few decades it has meant leasing for many people, and we are rapidly moving towards paying as you go — Uber today, self-driving cars tomorrow.