Apples competitive advantage came from the branded design that it only produced.

For example, the Macintosh was easy to use, with an industrial design and had technical style, but it was very slow in processing and not many programs can be installed on it because of they created their own hardware and software so it was not compatible. In addition, it was able to maintain more than 50% of the education sector and placed its layout with a plug and play system for customers. Apple has also offered its own Apple Stores, which give customers a unique retail experience.

In the 90s, manufacturers built PCs around hardware and software components mainly supplied by Microsoft and Wintel, which are suppliers to the PC industry. The first type supplies components hardware such as a RAM. These products are available in a wide variety of sources that have competitive prices. The other type of supplier provides products such as operating systems which have few sources suppliers such as Microsoft. In regards to manufacturing, many firms outsourced their manufacturing in Asia which was aimed to reduce costs. Also, many manufacturers aimed to create a build to order model to reduce inventory which reduces costs. The buyers where distributed to four main sectors in the 1990, which were business, home, government and education. The channels changed to buy directly from the vender. The level of innovation in the industry has decreased dramatically. The products were highly standardized with low margins. John Sculley became the CEO in 1985 for Apple. The company was the most profitable company in the world with sales of $5.6 billion, a 8% worldwide market share, 50% of the education market and had $1 billion in cash. It had a branded strategy where it designing its hardware, operating system, and software from scratch. The company characterized the concepts of complete vertical and horizontal integration. The industry was facing low levels of booming and decrease in prices. The apple products were high premium products so this cased a problem. Thus, apple adopted a low-cost strategy to regain market shares. Apple forged an alliance with IBM in 1991 with the objective of developing a revolutionary new operating system (OS) and it switched to IBM's PowerPC chip. Apple continued its low-cost strategy to remain competitive in the market. However, it was not enough to sustain Apple's profitability with its gross margin down 14%. In 1993, Mike Spindler became the CEO of apple and continued with a niche strategy through seeking to strengthen the market share in the education sector and desk top publishing The international growth was a key objective and Apple's low-cost strategy continued with a further reduction in headcount and reduced R&D spending. Apple reported a $69 million loss and Spindler was replaced by Gilbert Amelio in

1996. He set out to improve operations by restructuring the product line and further reducing the payroll and apple would return to its premium-price differentiation strategy. This made things turn worse because apple lost $1.6 billion and its market share sank to 3%. Steve Jobs returned to the company facing many problems. With this in mind, Jobs got Microsoft to agree to invest $150 million dollars in Apple and pledged to develop core products for the Mac through 2002. This alliance changed the company and the Mac licensing program came to an end and some critics say this is the reason for Apple's dull piece of the overall PC market.