Software did not become ubiquitous simply because it became better.
It also became dramatically easier to buy.
For decades, purchasing software meant licenses, installation, contracts, upgrades and large upfront commitments. SaaS changed that relationship. Customers could subscribe, start quickly, receive continuous improvements and leave when the product stopped creating enough value.
That shift transformed more than pricing. It changed how software companies built products, how customers evaluated them and how businesses thought about recurring relationships.
Hardware has experienced extraordinary technological progress, but commercially, much of it still operates according to an older model. A company manufactures a device, a customer pays hundreds or thousands of dollars upfront, the product is shipped and, a few years later, the company tries to convince that customer to buy another one.
As AI starts moving beyond screens and into wearables, health devices, robotics, home technology and purpose-built intelligent products, that model deserves another look.
Hardware may need its own SaaS moment.
Software Removed the Commitment From Buying Software
One of SaaS's biggest innovations was psychological rather than technical.
Buying software became less intimidating.
A company no longer necessarily needed to make a major purchasing decision to try a new product. It could pay monthly, test the software with a small team and expand if it worked.
The product itself could evolve after purchase. New features appeared automatically, bugs were fixed continuously and users no longer needed to buy "next year's version" to receive a better experience.
The relationship changed from buying a finished product to subscribing to an evolving capability.
Hardware hasn't fully made that transition.
When someone considers a $500 wearable, $1,000 home device or $2,000 piece of intelligent equipment, the decision remains relatively binary. Buy it or don't.
That creates friction before the customer has experienced much of the value.
What if hardware companies could reduce that friction in the same way SaaS did?
WHOOP Is Already Showing Part of the Model
WHOOP is one of the clearest examples of a hardware company thinking differently about what exactly the customer is purchasing.
WHOOP's current US plans include the device as part of an annual membership. Its One plan is listed at $199 per year, Peak at $239 and Life at $359, with different hardware and capabilities included depending on the tier. WHOOP also offers a trial using certified pre-owned hardware.
That distinction matters.
The customer isn't simply buying a sensor and then occasionally purchasing another sensor. WHOOP has structured the relationship around membership, with hardware, analytics, software, support and ongoing product evolution forming parts of the experience.
The company has been moving in this direction for years. When WHOOP introduced its consumer membership in 2018, it bundled the tracker, analytics and community into a recurring model. Later hardware generations were also positioned around membership rather than requiring every existing member to approach the new device like an entirely new retail purchase.
WHOOP is still a hardware company in an obvious sense. It designs and ships physical devices.
Commercially, however, it is much closer to selling continuous access to a health and performance platform.
That is a very different relationship.
Oura Shows Another Version of the Same Shift
Oura takes a different approach.
Customers still purchase the physical ring, but much of the continuing experience exists through Oura Membership. In the US, that membership currently costs $5.99 per month or $69.99 annually, giving members access to the broader app experience and personalized insights built around the data collected by the ring.
This creates an interesting hybrid model.
There is a hardware transaction, but there is also an ongoing digital relationship after the transaction. The physical object becomes the interface through which a continuously evolving service is delivered.
That distinction will become increasingly important as AI enters hardware.
A smart ring, wearable or home device can continue becoming more useful after the day it leaves the factory. The sensors may remain largely the same while models improve, software changes, new integrations appear and the intelligence built around the device becomes more sophisticated.
The value of the product is therefore no longer frozen at the point of purchase.
So why should the commercial model always be?
Hardware Has a Friction Problem
Hardware companies face a problem software companies largely escaped.
Upfront cost.
Imagine two products that could both create $50 of value for someone every month.
One is software costing $25 per month with a free trial.
The other is a device costing $600 upfront.
Even if the hardware creates more value, the decision can feel considerably larger. The customer has to believe the product will be useful before experiencing it.
This becomes especially important for emerging product categories.
Most people already understand why they might need a laptop or smartphone. The category itself has been established.
But what happens when a startup introduces an AI pendant, intelligent health monitor, home robot or entirely new type of personal device?
The customer isn't only evaluating the brand. They are evaluating whether they need the category at all.
Asking them to make a significant upfront purchase increases the difficulty of that decision.
SaaS solved a similar problem by reducing the cost of experimentation.
Hardware needs mechanisms that do the same.
Imagine Hardware Designed Around Access Rather Than Ownership
The more interesting model isn't simply adding a subscription to a device.
We have already seen plenty of products do that, sometimes badly.
The bigger opportunity is redesigning the entire ownership experience.
Imagine an intelligent health device available for $29 per month. The device, software and AI capabilities are included. Repairs and replacement are covered. After two years, customers can upgrade to the latest generation. When they upgrade, the old hardware is returned, refurbished and potentially used for trials or lower-priced plans.
Now compare that with asking someone to spend $600 upfront and hoping they buy another device three years later.
The economics are obviously more complicated for the manufacturer, but the customer relationship is fundamentally different.
The company isn't trying to maximize the value of a transaction.
It is trying to maximize the duration and value of a relationship.
That is much closer to SaaS.
AI Makes This Model More Interesting
For traditional hardware, most of the value historically existed inside the physical object.
A better camera required better camera hardware. A faster processor required a new chip. A better display usually required buying another device.
AI changes some of that.
Increasingly, the physical device captures information while software and intelligence determine what happens next.
A wearable collects signals, but algorithms turn them into health insights. A pair of intelligent glasses captures the world, but AI determines what the user can ask about it. A home device contains microphones and sensors, but its usefulness depends increasingly on the intelligence interpreting those inputs.
This means the value stack of hardware is shifting.
The physical product still matters enormously. Industrial design, battery life, sensors, durability, comfort and manufacturing remain difficult engineering problems.
But the device increasingly becomes one layer of a larger product.
Hardware + software + intelligence + data + service.
When value is delivered through all five layers, a one-time transaction starts looking less natural.
The Upgrade Cycle Could Change Too
One of consumer hardware's oldest growth mechanisms is the upgrade cycle.
Build a better product and convince existing customers to replace the old one.
That works exceptionally well for established categories, but it creates an unusual incentive. Companies need customers to repeatedly make another significant purchasing decision.
Membership-based hardware can potentially make upgrades part of the relationship instead.
WHOOP provides an early example of this thinking. Its membership model has historically connected access to newer hardware with the ongoing membership relationship, although the precise upgrade terms have evolved over time.
There are advantages for both sides when this works.
Customers don't have to think about whether a device they buy today will become obsolete shortly after purchase. Companies gain a more predictable relationship with customers and potentially a clearer path for introducing future generations.
The upgrade stops being an entirely new sale.
It becomes part of retention.
That is a powerful shift.
But Hardware Cannot Simply Copy SaaS
There is an important reason this transformation hasn't already happened everywhere.
Software has almost zero marginal manufacturing cost. Hardware doesn't.
Every device requires materials, manufacturing, logistics, inventory, warehousing, returns and potentially repairs. Financing a device upfront while collecting revenue over several years can also put enormous pressure on working capital.
There are environmental questions too. A subscription model that encourages unnecessary replacement cycles would simply create more electronic waste.
And consumers are already experiencing subscription fatigue. Putting another monthly fee on a product without creating continuous value is not innovation. It is just a different billing mechanism.
This is why hardware's SaaS moment cannot simply mean everything becomes a subscription.
It has to solve a genuine customer problem.
The Better Model Might Be Hardware-as-a-Relationship
Perhaps "Hardware-as-a-Service" doesn't fully capture where this is heading.
The bigger transformation could be from hardware as a transaction to hardware as a relationship.
The customer receives the physical product, but also continuous intelligence, software improvements, support, protection, upgrades and services around it. The manufacturer, meanwhile, has an incentive to keep the customer satisfied long after the box has been opened.
That relationship can create something traditional hardware companies often struggle to achieve: recurring engagement.
Instead of hearing from the customer when something breaks or when the next model launches, the company can remain part of the customer's daily life.
This also changes how hardware companies think about product development. Success is no longer measured only by units sold. Retention, engagement, recurring revenue, upgrade behavior and lifetime value become equally important.
Hardware starts borrowing the operating logic of software.
The Next Great Hardware Companies May Sell Fewer "Products"
The smartphone era consolidated enormous amounts of functionality into a single device. Cameras, GPS units, music players, calculators, voice recorders and dozens of other standalone products disappeared into one screen.
AI may create an interesting countertrend.
Intelligence is becoming cheap enough to embed into increasingly specific objects. That creates room for smart rings, glasses, health devices, home products, robotics and categories that may not yet have obvious names.
For many of these companies, the traditional model of manufacturing a device and hoping millions of people buy it upfront may not be the only option.
They can potentially build smaller initial commitments, recurring relationships, continuous intelligence and predictable upgrade paths into the business from the beginning.
WHOOP and Oura show pieces of what that future could look like, but we are probably still early.
The BeyondB Perspective: The Business Model Is Part of the Product
At BeyondB, we believe some of the most interesting opportunities in hardware will come from companies that rethink more than the device itself.
A technically brilliant product can still struggle if the buying experience creates too much friction, the category is difficult to understand or the business depends entirely on repeatedly finding new customers for expensive one-time purchases.
This is particularly important for new categories where positioning, pricing, distribution and product design cannot be treated as separate decisions. How the product is packaged can determine who is willing to try it. How it is priced can influence adoption. The recurring digital layer can determine retention, while the upgrade model can shape lifetime value and the long-term economics of the company.
BeyondB looks at these layers together because building a successful hardware company increasingly requires more than building exceptional hardware. The technology, positioning, distribution and commercial model have to reinforce one another.
The companies that get this right may discover that their most important innovation wasn't another sensor, chip or form factor.
It was making hardware dramatically easier to adopt, experience and keep.
Software had that moment.
Hardware is ready for one too.
