Subscription Model

Subscription model: for those who have been paying attention, the new mantra in technology and streaming services -- "monthly revenue stream." Amazon took the lead with Amazon Prime and then Alexa; that opened the doors. Sure, others were doing it before Amazon but Amazon's Prime and Alexa really, really opened up the concept to the masses and for other companies to emulate. 

Apple: watch for Apple to announce -- at some point in the future -- that they are starting to take orders for their new car. Re-posting from December 23, 2020, well before we heard the official announcement regarding an Apple-Hyundai partnership. Note the "2024" date in the post below -- posted December 23, 2020. That's now the same date that Apple is using: 2024. 

By the way, elsewhere, Apple mentioned that it was moving toward a "hardware / software" subscription" model without further elaboration, but one can imagine. Technically, most folks buy their new iPhones on a subscription model even though such purchases are not marketed that way. But one can imagine it's a small step from "an iPhone by subscription" to "a MacBook Pro by subscription." This is different than purchasing with a credit card. For the buyer, the difference may be immaterial, but think about it: instead of paying for an Apple MacPro with one's Visa card, one pays a monthly fee directly to Apple. The "middle man" is bypassed; money paid directly to Apple. One would think the cost savings would be passed back to the consumer. LOL. For investors, think what this might mean for MasterCard, Visa, Discover, etc. 

Note: later a reader provided this bit of insight, which suggests an example of monthly revenue stream in the truck market:

Although I no longer closely follow Nikola Motor, (the CEO's shenanigans were a real gut punch), their approach to vehicle sales/distribution struck me as particularly brilliant.

Condensed version ... Nikola would not sell any Class 8 trucks, only lease them for, I believe, 7-year terms, with monthly fee set, all maintenance costs included (sans tires, I think), and one million miles free fuel (hydrogen,  as  the trucks were re-designed to be battery/electric with recharging mechanism  being hydrogen fuel cells. 

 

The novel electrolysis - based hydrogen production may yet be the most enduring impact ... IF it is shown to 'work').

Longer term, the shift towards some type of electric propulsion may yet prove viable, but MANY differing approaches are ferociously competing for dominance.

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Fanciful AppleCar Reservations And Pricing

The tea leaves suggest it is only a matter of time before a monthly subscription will be the way folks buy EVs in the future. 

For example:

• Apple sets the base price of their 2024 model for $100,000;
• one can reserve a 2024 model by subscribing;
• the initial down payment is $1,000 and then a monthly "fee" of $500 until the car is delivered;
• the initial down payment gets you a coupon to purchase the car at 75% of the advertised price ($100,000 in this case);
• the delivery date is stamped on the coupon (first come, first served method) and guaranteed; every month delay would require the regular $500 subscription fee but the price of the AppleCar would come down by a similar amount each month until delivery;
• the AppleCar like all Apple products would have a warranty for one year, with an extended AppleCarCare warranty up to ten years, also at a subscription/streaming price;
  
• the coupon is transferable with no strings attached, and can be bought and sold like any other equity; the AppleCarCare warranty would also be transferable.

The price points shown are just pulled from thin air, but "Disney analysts" could easily come up with the best price points for the initial down payment and the monthly "fees." 

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