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How Subscriptions Could Impact The UX of IoT Devices

by | Apr 27, 2022 | Internet of Things

Monthly premiums are standard for software applications and streaming services, but until now, smart devices have been relatively untouched by the subscription business model the tech world has adopted. That will probably change soon, if IoT device manufacturers and businesses that sell IoT devices have anything to say about it. 

It’s easy to see why businesses want to switch over to subscription models. Recurring monthly fees provide a more stable, ongoing revenue stream than up-front costs alone. Plus, subscription models usually result in customers paying more over the long term than they would have otherwise, leading to increased total profits for the company. But this means customers often get left with the short end of the stick. All you need to do is check user reviews of mobile apps that were once purchased with a one-time fee and which now require monthly installments to see upset customers voicing their opinions. 

Customers used to paying for a device once and then being able to use it free for the lifetime of the device will be disappointed to see mandatory subscription sign-ups blocking them from accessing their usual IoT device user interface. Additionally, customers who use a service infrequently or only under special circumstances won’t appreciate having to pay a monthly fee to continue using a device they’ve already purchased and only need to use once in a while. 

IoT businesses are floating some ideas they think might sweeten the pot for users willing to make the transition. IoT device subscriptions could provide a lower initial entry cost for users who want to dabble with smart devices, because companies often provide the hardware for a nominal price, or even free, when users pay a monthly subscription fee. But extended subscription costs for long-term users would far exceed the higher price of buying an IoT device up front with no subscription tacked onto the back end. 

IoT companies could also offer access to premium services, such as customer support or higher tiers of features, to customers willing to pay for them. There is also an implied promise of personalization with subscription models; companies often try to make the user experience more customizable and enjoyable when that experience is attached to a monthly fee. 

These strategies might offset some of the negative reactions from customers, but any company that wants to abruptly switch from an up-front fee to a monthly fee may still be in for an uphill battle when it comes to satisfying existing customers and attracting new ones. 

Software Design Solutions builds complicated software and hardware for embedded systems and IoT devices for a wide range of markets—industrial, medical, audio/visual, networking, security, consumer, and government. We are based in Pittsburgh, PA; SDS continues to serve clients across the nation for everything from sensors to space travel.

Software Design Solutions builds complicated software and hardware for embedded systems and IoT devices for a wide range of markets—industrial, medical, audio/visual, networking, security, consumer, and government. We are based in Pittsburgh, PA; SDS continues to serve clients across the nation for everything from sensors to space travel.

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