While Edison worked on important new projects in the 1880s,  Alexander Graham Bell’s cousin Chichester Bell and assistants including the talented Charles S. Tainter in 1880 began investigating the nature of sound in a new laboratory in Washington, D.C. The next year, they developed what would become known as the Graphophone, an improved form of the phonograph, and deposited a prototype with the Smithsonian Institution.

The main differences between Phonograph and Graphophone, at least at first, were that the graphophone used a form of hard wax as the recording medium rather than tin foil, and the recording was cut or chiseled into the wax rather than being embossed like the Phonograph. The model at the Smithsonian appears to have been an Edison phonograph (or a copy) with the grooves in the cylinder filled with wax rather than wrapped with tin foil.

The inventors delayed several years and then filed for patents, which were granted in 1886. By this time, they had developed a replaceable recording medium consisting of a cardboard tube with a thick coating of wax, and several mechanical improvements.

Representatives of the firm set up to commercialize the Graphophone approached Edison about a cooperative agreement as early as 1885. Instead, the inventor returned to his Phonograph in 1886 and made numerous patent applications for improvements by 1888. Both the Edison and Graphophone interests proceeded to try to manufacture and sell their versions of sound recording technology. The first Graphophones were marketed as business or office recorders to replace human stenographers in creating letters and other documents.  By 1890, Edison’s team had redesigned the phonograph to suit this purpose, too.  Neither company made much money during the first few years.

Meanwhile, other investors bought the rights to make and sell Phonographs and Graphophones in various regions, and one of the operators of these companies discovered a more lucrative way to use the machines:  as public amusements. Coin-operated record players soon became common in public arcades.

Edison continued to make improvements to the phonograph, began working toward an inexpensive home record player, and went into the business of making entertainment records.