HP dangles subscription hardware at power users Microsoft's Surface has become a victim of its own success. This year’s iteration reuses the same case, maintaining compatibility with peripherals. Several PC rivals can boast better value in the premium professional segment with more interesting designs. HP Inc, for one, can boast striking designs and a comprehensive …
at $156/month. This is like the current trend with cars - where you lease (with a very small mileage allowance) and end up with nothing after 3 years - having almost paid the cost of buying it.
Every business these days seems to be trying to tie customers in to a monthly payment. I assume that it is for the benefit of the business not the benefit of the customer - although marketing will try to convince you of that.
I suppose that they don't sell to engineers or devs because they are sufficiently mathematically able to work out that it will be a bum deal.
"I suppose that they don't sell to engineers or devs..."
But corporate beancounters see past only yesterdays numbers.
Also, what does this mean...
"...making the premium sales more hotly contested."
Contested by who and by which side of the price?
<quote> Does not take long to buy the hardware ... at $156/month.</quote>
You are right, it doesn't.
But.....
In the USofA, no thanks to the Tax Laws, you run into the old debate - CAPEX vs OPEX.
Buy it outright for (let's use a round figure of) $3700. That's $3700 straight out of your pocket (and possibly out of current profits), and you have to depreciate it over its expected lifespan. Assume a residual value of $100 at the end of a 36 month lifespan; you get to 'write down' the value by $100/monthly. Again, assume that you bought it in early January, and your first year writedown is only $1200. You have to carry the remaining $2400 as an asset, and can not depreciate it until year 2 and 3 before it no longer benefits from a depreciation schedule. If that $2400 came from profits, then guess what - you pay taxes on it! Only in year 2 and 3 do you get the benefit of the previous expenditure. That depreciation goes against profits from year 2 and 3.
Contrast that to a lease - leases and a straight expense, written off as a business expense as they are incurred. No taxes paid on those writeoffs.
Now you have some inkling as to why beancounters want to shift as much CAPEX into OPEX as they can get away with.
Slightly different in the UK. We get a capital allowance which means you can claim the whole value against tax in year 1 while maintaining the balance sheet value of the asset with a balancing value.
There's a limit, but it's higher than most small businesses need to worry about.
For larger companies, it's still easier to slip a monthly fee of £150 through budget approvals than a one off very expensive laptop.
The problem with car leases is the pitiful annual mileage allowance in the lease. I've seen a BMW M3 with a 5K per year mileage.
I'm sure that it won't be long before leasing a PC will come with a limit on the number of hours a year I can be in use and that the leasing company will mandate that it's recording app is always running.
The leasing game is only a winner for the leasing companies. For everyone else? It is IMHO a mugs game.
If something is on subscription, I expect top quality reliability and performance each day during the subscription, so you'd better be replacing the laptop with a new shiny on every 6 months if you want to pull that trick, otherwise you'll be trying to stiff me twice - once for the hardware and its eventual replacement and once for the subscription to use the thing I've already purchased.
HP - You can pick one but not both..
I will pick one - not buying anything on subscription as there is zero benefit to me and there are lots of problems - such as paying way over the top compared to what I've already got.
I can see only one major advantage to leasing versus buying the product outright. The moment a Win10 update bricks your machine you call up the leasing company & demand they replace it with a brand new, fully functioning unit or cancel the lease "because I'm leasing a *working* computer, this one isn't working, so bill Microsoft for their cockup."
You get a new computer, the depreciation starts fresh on the new one, & the leasing company is stuck with the repair bills. They *may* try to stick you with an "equal value unit" that turns out to be refurbished, but you can cite the fact that the lease was for a brand new unit not a refurbished one, thus they either send you the brand new one or cancel the contract.
Otherwise I agree with the sentiment that buying it outright makes more sense (cents). Especially if you put it on a credit card that offers warranty guarantees that any problems the seller refuses to fix allows you to give it to the CC company, the CC company refunds your money, & then turns their legal hounds loose on the seller.
Someone else who also gets it is the regular taxpayer. He/She gets to cover the difference for creative accounting of corporations.
Also the customer gets to pay for always new toys - similarly to car leases, service "deals" encourage getting more than really needed, as most lessees can't see past monthly payment. Hopefully the option of just buying the stuff won't be discontinued by rent seeking vendors.
BTW, expecting that suddenly all problems are resolved immediately just because one pays monthly is fallacy. Not only cost skyrocket with such expectations but also not every employee wanted/could have his workstation just dropped into box and replaced with new one with no transition period (or just honest attempt at restoring "old" system). This works in emergency but few really like it.
In the end only corps win.
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