How does this differ from any Product as a service?
The mobile phone industry pretty much from the beginning (of consumer phones at least) bundled in the phone with the contract, its only in the last generation of phones or so that most people haven't been desperate to replace the handset with something better^w^w^w^w shiny? Why is that? Could it be because mobile phone handsets are now a mature product - able to do what most people need and want them to do? In the last decade mobile phone operators have started to offer SIM only deals, where as the trend in most other industries is to try and run product as a service:
We don't buy cars any more - we lease them
We don't buy a bike - we rent them by the hour
We don't buy music any more - spotyify and friends
We don't buy software any more - we rent it as a service
We don't buy servers any more - we rent space in the cloud
Sure CAB are right to point out that purchasing a phone and airtime separately can be more cost effective, but if people are too damn lazey to work out the costs for themselves...
One last thought though, if we could all work out the true Total Cost Of <foo> and put a real value on non-tangibles would we be outsourcing everything?