Apple and Ninety Years Ago
In the beginning, radio stations went on the air without visible means of support. The first stations were commissioned by Westinghouse, which made radio sets, Crosley, which made radio sets, General Electric, which made radio sets, and ... well, you can see where this is going. Some department stores started up stations because, well, radio receivers sell better when there is something to listen to on them. Even AT&T got into the act, having acquired a particularly valuable patent that would provide them an ongoing revenue stream.
However they all figured out that eventually everyone would have a radio set, maybe even two, and then the revenues and profits would stop, or at least slow down to a replacement, rather than acquisition cycle.
And then WEAF (later WNBC and now WFAN) in New York (owned by AT&T at the time) carried a radio commercial for the Hawthorne Court Apartments in Jackson Heights. 90 years ago this week. AT&T, above all the others, understood the concept of "renting time", since that's what they did on their telephone lines.
You don't have to go back 90 years to imagine what radio was like in the summer of 1922, just recall the state of the Internet about a dozen years ago, a modern miracle of technology with one problem: Nobody knew how to make it pay. Well, that was radio in 1922. How do you finance an endless stream of programming and still make money? One possibility, the profits from radio receivers, which may explain why so many department stores built their own broadcast stations that year.
As we look at the bending trend in iPad sales, I can't help but think that the same thing will happen with iPhone sales especially and particularly if the "subsidy" model breaks or bends, as it threatens to do. With feature parity I suspect people will hold their instruments a little longer, and the "first time acquisition" market will dry up, and even the replacement cycle will elongate.
Don't get me wrong, there's still gas in the engine, but I do believe Apple needs to find more sources of revenue. iTunes is being attacked by streaming services (and Apple's offerings haven't swept the world as iTune 99-cent breakthrough did). iPod sales are declining. iPad sales are flattening, and iPhone sales are increasingly growing in foreign countries - where there is also increasing competition in all segments.
Well, I wish I could say more... ;) But it's gonna be interesting...