As the extent of paycheck-to-paycheck living even among high earners becomes clear in the pandemic’s wake, ideas around ownership continue to shift. Lease-to-own (LTO) and buy now, pay later (BNPL) are popular options, as is the trend of renting one’s digital devices.
Given that smartphones are generally sold on lease terms now — you pay a monthly fee and own an outdated device about 18 months later — the spread of subscription commerce is revitalizing a device-rental industry that is dominated by small businesses.
Definitions between leasing, renting and subscribing to device services can be a bit hard to follow, but to simplify, consumers want more flexible options for device payment.
The breaking news comes from digital device-rental platform Grover, announcing Thursday (April 7) that it’s $330 million Series C fundraise is complete, conveying unicorn status.
Read more: Subscription-Based Consumer-Tech Company Grover Valued at $1B
“The tech rental movement is a major worldwide societal shift, one that will transform how we access and use technology to be more flexible and sustainable,” said Grover Founder and CEO Michael Cassau. “We see players from all sides of the market getting ready to join this phenomenal new market segment with extraordinary growth and profit opportunities ahead.”
Apple shook things up in late March, announcing that it is introducing a hardware subscription service in 2022.
See more: Apple Developing iPhone Hardware Subscription Service
In its coverage, CNBC reported: “The move would represent the culmination of a longtime Apple investor desire for the company to sell its hardware as a subscription. Doing so would boost recurring revenue and could lead to an increase in the stock price.”
This represents a foundational change in how smartphones are sold by device makers and major carriers like Verizon and T-Mobile, pairing data plans with hardware you end up owning.
Proponents say this model is both more affordable for many consumers and more sustainable from an environmental, social and governance (ESG) perspective.
The burgeoning Device-as-a-Service (DaaS) sector has major implications for how startups and established businesses can also make their IT expenditures more beneficial and less wasteful.
The B2B Angle
“One growth area for Grover is its business-to-business rental service, through which customers such as technology startups can rent devices including laptops and smartphones,” The Wall Street Journal (WSJ) reported. “Mr. Cassau said the business-to-business service accounts for 15% of Grover’s subscriptions and it wants to increase that figure to 40%.”
French startup Fleet is driving the DaaS model, noting on its website that “Thanks to an all-inclusive subscription, DaaS allows you to benefit from always high-performance computers and cellphones and support comprising a set of services (incident monitoring, renewal, etc.).”
Whether the issue is consumer affordability or B2B spend management, the hardware rental sector is on the threshold of what many market watchers see as a big post-pandemic trend.
For businesses especially, seeing expensive hardware gather dust in empty offices over the past two-plus years of remote work is becoming a deciding factor in device procurement.
Describing the pre-pandemic ritual of buying laptops with corporate cards, TechCrunch reported in February that the “practice stopped when offices closed, and as buildings sat empty, all those unused laptops, desktops, widescreen monitors and Aeron chairs began to look like a poor use of precious cash.”
That’s where startups like Spain-based Emendu are coming in with its four-step leasing process for smartphones, laptops, tablets and accessories, allowing companies to simply trade in older gear for newer at the end of lease.
On the consumer side of the DaaS trend, startup everphone announced Tuesday (April 5) that “it is providing 60,000 Hyundai Technology tablets to underserved households across America. This effort, which will take place over a 12-month period,” under the Federal Communications Commission’s (FCC) Affordable Connectivity Program.
Read also: 26% Won’t Buy Durable Goods at Retailers Without Lease-to-Own Option
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