The Hardware Business Nobody Wants to Admit They're In

Selling a physical device once is a bad business — margins are thin, competitors can copy the specs within a product cycle, and there's no revenue after the sale. Every successful device company eventually figures this out and quietly becomes a services company: the device is the acquisition cost, and the relationship afterward is the actual business.

This reframing changes what "winning" in hardware looks like. The goal isn't the best spec sheet at launch; it's making the device the default gateway into a set of services sticky enough that switching hardware later means giving up everything built on top of it. The device becomes a loss leader for the ecosystem, even when it's priced at a premium.

Understood this way, the interesting competitive question isn't "whose phone is better" — it's "whose services would you miss more if you switched."