[screamingninja]

Your concept is mathematically sound, but if there exists an opportunity to double dip to boost profits, what would make a corporation turn it down? As you noted in case #1, companies are paying much more for the materials. Consumers are still ultimately paying for it.

The entire point of amortizing the upfront costs is to keep the consumers hooked by charging a smaller recurring amount that stings less but certainly adds up to a bigger amount than the original upfront costs.

Besides, why would a company go through the added hassle of creating and managing a subscription model and risk pissing off customers through this nickeling-and-diming if not for more profits?

I am sure that there is still some silver lining to this scenario (e.g. I live in hot climate and don't need heated seats), but I fail to see any that apply to a broad number of consumers.

[kevincox]

> companies are paying much more for the materials

They are paying more for materials but less for manufacturing costs and overhead. The total cost is less. So by your logic consumers are paying less than before.

> keep the consumers hooked by charging a smaller recurring amount

Yes, I disagree with the subscription model. I am talking more about one time payment for a hardware-locked feature.

[screamingninja]

> They are paying more for materials but less for manufacturing costs and overhead

I suspect this is a complex, wicked problem. What about the marketing costs, subscription management overhead, and the ensuing PR damage?