Someone looking at Apple’s last quarterly earnings report made an observation which is pretty damn important: the iPhone has become Apple’s second most important source of revenue. That puts the iPod into third place, with actual Mac computers still retaining the leading spot.
The iPhone’s success on Apple’s balance sheet is a good thing. As neat as the iPod is, you can’t keep selling the same product to consumers forever, even if it is updated regularly. Eventually, you reach market saturation, or someone comes along with something like your product but cooler (Zune HD, cough), or something else happens that makes your old product lose.
Apple, whether this was intentional or not (and I suspect it was), did what most companies are too arrogant to do: they created the product which is killing their own old cash cow. Apple came up with that next step themselves, and in doing so has been able to keep its place as the industry leader in gadgets on which users play media. My problem with the Zune HD is that it’s not a phone; I don’t want to carry around a phone and a media player when I can get away with having a really sweet all-in-one device.
Apple’s business model is a tough one. The Mac will rise and fall over the years, but the thing that has really boosted Apple these days is its position in the cool devices game. That’s a hard business to be in: if Apple doesn’t come out with something really desirable once every five years or so, they’ll end up where they were before Steve Jobs came back to the company. Fortunately, the iPhone is for now that cool new device. But sooner or later, Apple will need to come up with a way to replace that, too.
(Info via CNN Money)
