In the age of big data and wages failing to keep pace with inflation, it seems every product is becoming a service — every commodity a subscription. According to the Subscription Economy Index’s 2021 report, the subscription economy grew by a whopping 435% over the prior decade. Rather than buying a product once and keeping it for a finite amount of time, companies are increasingly shifting to a subscription business model to achieve more predictable income, decrease customer acquisition costs, and collect customer data to increase profits for shareholders. This economic shift has left many consumers frustrated by their inability to actually own their assets, with the average American spending $1,600 each year on subscriptions.
A new target of the shift toward a subscription economy is Logitech. In an interview with The Verge, CEO Hanneke Faber described her vision for a “forever mouse” featuring high-quality hardware and over-the-air software updates. In this case, the customer would pay to access the mouse’s features, while Logitech would likely own the physical hardware. This is an example of software-as-a-service (SaaS), in which the user pays for an ongoing software license instead of owning a product with software features. Faber compared the “forever mouse” to a Rolex watch — durable and high-quality, leading the way toward a more sustainable future. Although this business model would guarantee long-term software improvements, the problem is that some hardware aspects of a mouse cannot be improved by over-the-air updates.
The subscription model benefits consumers when the initial cost of ownership is prohibitively high, or when the amount spent on recurring payments remains similar to the long-term value of the product or service. Subscriptions make sense because customers pay for the value they receive, or the outcome they achieve by using a product or service. However, subscriptions also drive overconsumption, and many consumers struggle to bear the cumulative cost of their monthly subscriptions.
The problem with Logitech’s concept of the “forever mouse” is threefold: the upfront cost of a mouse is reasonable for most consumers, the money spent on maintaining one mouse for 10 or more years would almost certainly eclipse the mouse’s monetary value as a physical product, and, crucially, a mouse relies on both hardware and software to stay competitive.
The validity of Faber’s idea, then, hinges on whether the software updates would be able to keep a “forever mouse” competitive regardless of hardware. Over-the-air updates could reduce latency, address software issues, optimize battery life, and improve tracking accuracy using algorithms. However, software updates cannot change a sensor, reduce weight, replace switches, or implement new wireless connectivity standards. The question then becomes whether mouse hardware has peaked, the answer to which is most likely no, as design and shape continues to evolve even as some specs stagnate. A key benefit is that, if the “forever mouse’s” hardware were to fail, users would likely have access to a robust warranty from Logitech. On the other hand, if the hardware were to become obsolete and non-competitive, key components would need to be replaced — inducing additional costs on the consumer and literally contradicting the idea of a “forever mouse.”
If Logitech is intent on providing a unique value proposition through software updates, it might make more sense for the company to adopt a hybrid model. Similar to Tesla’s software-enabled Full Self-Driving, Logitech could offer a subscription service for continual software improvements while continuing to release new hardware. This would offer the company an additional, more predictable revenue stream, while allowing its customers to choose which features they need. Additionally, the “forever mouse” idea might be possible if a strong warranty provided modular replacement parts to the customer, allowing them to continually upgrade their existing mouse over time. Alternatively, if the company takes sustainability seriously, it could instead make all its mice modular and sell replacement parts on its website. Opponents of the idea argue that Logitech should provide software support for all its products, without the need for a subscription. The “forever mouse’s” proposed subscription model has already alienated consumers who view it as a cynical cash grab, rather than a genuine attempt at moving the computer peripheral industry forward.
In the end, despite the numerous benefits of over-the-air updates, a mouse is simply not the right product for a subscription model. It is impossible to make technology futureproof. While software updates could provide immense value for owners of existing mice and could differentiate Logitech from its competitors, they cannot overcome the need for hardware innovation.
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