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So, the device is sold at a loss at 100 Euro but it doesn't work without mandatory services that cost 500 Euro per year?
by pmontra 2y ago
So, the device is sold at a loss at 100 Euro but it doesn't work without mandatory services that cost 500 Euro per year?
- mrtksn 2y agoMaybe, I don't know. Its up to the companies to do the math, who would like to pursue this model. If it's not feasible, the shouldn't be doing it though. AFAIK BoM is usually no that high, so it can be viable. Anyway, maybe some depreciation calculations might be used to account for wear&tear but the core idea is that if you are selling something that works only on your other services by actively preventing competition you shouldn't be charging for the hardware that delivers that and the money you take upfront is just a fully refundable deposit to cover stuff like the consumer breaking the device or taking it but not using the services.