Back in 1997 Apple Computer was in deep trouble.

Apples worldwide market share, which had been uctuating between 7% and 9% since 1984, had sunk to 4%. Sales were declining. Apple was on track to lose $378 million on revenues of $7 billion, and that on top of a $740 million loss in 1996. so that in mid 1997, the company recalled the co~founder of the company, Steve jobs, who had been red from Apple in 1985. By 2006 the situation looked very different. Apple was on track to book record sales of over $19 billion and net prots of close to $1.9 billion. The stock price, which had traded as low as $6 a share in 2003, and the market capitalization, at $63 billion, surpassed that of Dell Computer, which was around $48 billion. Driving the transformation were strong sales of Apples iPod music player and music downloads from the iTunes store. In addition, strong sales of Apples MacBook laptop computer had lifted Apples market share in the U.S. PC business to 4.8%, up from a low of under 3% in 2004. Moreover, analysts were predicting that the halo effect of the iPod, together with Apples recent adoption of Intels microprocessor architecture, would drive strong sales going forward. History of Company On a April 1976, Steve Jobs and Steve Wozniak, started a company to sell a primitive PC that Wozniak had designed. See the success of their creation, Jobs then intend to sell these creations PC. The idea that somebody would actually want to purchase his machine had not occurred to Woz, but it did to Jobs. Jobs persuaded a reluctant Woz to form a company and sell the machine (that named Apple I), and They sold around two hundred of them at $666 each. The Apple I had several limitations, that is no case, keyboard, or power supply being obvious ones. In the late 1976, Jobs and woz develop the Apple I to the Apple II. In the same years, Jobs and Woz cooperate with Mike Markkula, the man who retired from Fairchild and Intel. He committed to investing $92,000 for one-third of the company and promised that his ultimate investment would be $250,000. Then them hire Michael

Scott as a president of company, who had worked for Markkula at Fairchild. The Apple II was introduced in 1977 at a price of $1,200. The first version was an integrated computer with a Motorola microprocessor and included a keyboard, power supply, monitor, and the basic programming software. By the end of 1980, Apple had sold over 100,000 Apple II, making the company the leader in the embryonic PC industry. The company had successfully executed an IPO, was generating over $200 million in annual sales, and was protable. Apple introduced its next product, the Apple III in 1980, but it was a failure. Indeed, successive versions of the Apple II, each an improvement on the proceeding version, continued to be produced by the company until 1993. In total, over 2 million Apple II computers were sold. In 1980, Apple made two important project, that is LISA (a high-end business machine) and the Macintosh (a low-end portable machine). This project were influenced by Engineers at PARC that had developed a number of technologies that were later to become central to PCs, including a graphical user interface (GUI), software programs that were made tangible through on-screen icons, a computer mouse that let a user click on and drag screen objects, and a laser printer. But the LISA project was pulled by president Michael Scoot because This project requires a high cost. In 1984, macinthos introduced and was captured attention market for its stylish design and its use of a GUI, icons, and a mouse, all of which made the machine easy to use and which were not found on any other PC at the time. In early 1985, Apple posted its rst loss indicated because it continues to develop at Macintosh division, and then the broad of directors to strip Jobs of his management role and oversight of the Macintosh division. In 1985, Jobs resigned from Apple because it. Company continue to perform fix the problems with the Macintosh. In I986, a new version of the Macintosh, the Mac Plus, was introduced. Sales started to grow again, because Apples domination of the

desktop (PC) publishing market. Apple also continue to develop the software too. The years between 1986 and I991, Apple was achieved success because producs (Apple II nor Macintosh) still dominating desktop publishing. Gross margins on the Mac line got as high as 55% because Apple was able to charge a premium price for its products. In 1990, Apple sales reached $5.6 billion, the company had a strong balance sheet and Apple was the most protable PC manufacturer in the world. Another problem arises when Bill Gates made an offer to Apple to license its Mac operating system (Mac OS) to other computer manufacturers, disagreement occurs because on the one hand it could lead to copyright infringement. But in the end (1985) the company has licensed its Mac operating system (Mac OS) and visual displays (GUI) to Microsoft. That licenses adverse impact on Apple, because in a few years later Microsoft is able to develop GUI, that are the hallmarks of Apple is not owned by any other PC company. The Microsoft product Called Windows, it mimicked the look and feel of the Mac operating system. in 1990 Microsoft introduced Windows 3.1, its own GUI that sat on top of MS-DOS, and Apples differential appeal began to erode because Apple is not the only company that has the technology (OS and GUI). MS~DOS/Windows operating system and an Intel microprocessor, now the dominant standard found on 90% of all PCs, because it is marketed at a price lower than Apple. That it becomes a problem for companies, because Apple have high cost structure. It spent signicanly more on R&D as a percentage of sales than its rivals (in 1990, Apple spent 8% of sales on R&D, Compaq around 4%). Its microprocessor supplier, Motorola, lacked the scale of Intel, which translated into higher costs for Apple. Moreover, Apples small market share made it difcult to recoup the spiraling cost of developing a new operating system, which by 1990 amounted to at least $500 million. Therefore, in the same year the company implemented various strategies to survive. Companies try to seek to bring out a

low-cost version of the Macintosh to compete with IBM clones. The result was the Mac Classic, introduced in October 1990 and priced at $999. He also cut prices for the Macs and Apple II by 30%. The reward was a 60% increase in sales volume, but lower gross margins. Then the company also cut costs with reduced the workforce at Apple by 10%, the salaries of top managers (including Sculleys) were cut by as much as 15%, and Apple shifted much of its manufacturing to subcontractors (for example, the PowerBook was built in japan, a rst for Apple). Then the last strategy that company use, the president of the company also called for the company to maintain its technological lead by bringing out hit products every six to twelve months. The results included the rst Apple portable, the PowerBook notebook, which was shipped in late 1991 and garnered very favorable reviews, and the Apple Newton handheld computer. Then Apple also entered into an alliance with IBM. Apple that was the IBM alliance had several elements. One was the decision to adopt IBMs Power PC microprocessor architecture, which IBM would also use in its offerings. A second was the establishment of two joint ventures (taligent), which had the goal of creating a new operating system, and Kaleida to develop multimedia applications. A third was a project to help IBM and Apple machines work better together. But the strategy is still not provide profit for the company, because gross margins of product still low and continuing high costs. So in 1994, the CEO Sculley left Apple and he was replaced by Michael Spindler, a German engineer who had gained prominence as head of Apple Europe. In 1995, Microsoft launching Windows 95, that was a big improvement over Windows 3.1. Responded it, Apple committing to develop a next generation operating system for the Macintosh, and in the same year IBM and Apple parted ways, ending Taligent (joint venture), which after $500 million in investments had produced little. In the last quarter of 1995, gross margins slumped to 15%, down from 29% in 1994, and Apple lost $68 million, and company announcing 1,300 layoffs, due to the a price war in Japan

cut margins in one of its best markets. And than Apple purchased NeXT, the computer company founded by none other than Stevejobs, for $425 million, but By mid-I997, market share had slumped to 3%, from 9%. The company booked a loss of $742 million in 1996 and was on track to lose another $400 million in I997. lt was too much for the board. So that the CEO, Spindler was fired and then Steve Jobs was appointed interim CEO. His first act was to visit Bill Gates and strike a deal with Microsoft. Microsoft agreed to invest $150 million in Apple and to continue producing Office for the Mac through until at least 2002. Then Jobs ended the licensing deals with the clone makers, spending over $100 million to acquire the assets of the leading Mac clone maker, Power Computing, including its license, jobs solve problem slow-selling products, most notably the Apple Newton hand-held computer, and reduced the number of product lines from sixty to just four. He also pushed the company into online distribution too. After Jobs returned as CEO, in 1998 Apple was emerged iMac. The differentiator for the iMac it was the design of the machine itself. A self-contained unit that combined the monitor and central processing unit in translucent teal and with curved lines, the iMac was a bold departure in a world dominated by puttycolored PC boxes. Therefor Apple may have spent as much as $65 a machine on the casing, compared with perhaps $20 for the average PC. Priced at $1,299, iMac sales were strong with orders placed for 100,000 units even before the machine was available. In 1999, Apple followed up the iMac with introduction of the iBook portable. Aimed at consumers and students, the iBook had the same design theme as the iMac and was priced aggressively at $1,599. Sales of the iMac and iBook helped push Apple back into protability. In 1999, the company earned $420 million on sales of $6.1 billion. In 2000, it made $611 million on sales of almost $8 billion. To keep sales growing, Apple continued to invest in development of a

new operating system, the rst version of Apples new operating system, is called OSX was introduced in 2001. OS X offering superior stability and faster speed than the old Mac OS. Apple also develops its own application so as not to always rely on the vendor software. Apple also continued to update its computer, and in Apple introduced its Titanium PowerBook G4 notebooks. Then ln 2004, Ives design team came out with yet another elegant offering, the iMac G5 computer, which PC Magazine described as a simple. But overall both in terms of market share or sales, Apple is still trailing far behind industry leaders Dell, Hewlett-Packard, and IBM/Lenovo. Weak demand combined with its low market share, was allegedly cause loss for Apple in 2001. Since 2005, Apple uses Intel microprocessors which were faster and had lower power consumption, the companys sales of the new Macs exhibited healthy growth in midle 2006. sales of Macs had been slow during late 2005 and early 2006, this seems to have been due to consumers putting off purchases while waiting for the new machines and new technology. Other Apple strategy is to design its own retail stores with the concept of premium and luxury. The retail store also serves as a showroom as well as allowing consumers to try, this has been done by its competitors. iPod Technology shift towards the music industry from analog to digital player. Response to it, Apple created the product innovation is iPot and iTunes. This product is intended to meet the needs of consumers against the growing popularity of digital music. Macs did not have CD burners or software to manage users digital music collections, therefore the company did Apples software developers to create the iTunes program to help Mac users manage their growing digital music collections. iPad is also designed with a elegant model and attractive, just like other Apple products. Differentiiated between iPad and

another produk is a music storage capacity is very large, and accessories are diverse with an attractive appearance. The company also makes the iTunes store by cooperation with record companies to enable customers to download music legally. iPad sales continue to rise until mid-2006, in this sixmonth period, Apple sold 22.5 million iPods and generated $4.26 billion in sales. Apple's success in the music player industry is inviting its competitors (Microsoft) to produce similar products. Apple responded by continuing to develop their products, Apple released its new product in 2006 a smaller versions of the iPod, such as the iPod Shuffle and iPod Nano, that had longer battery lives, bigger hard drives (enabling some models to store up to 15,000 songs or I50 hours of video), and brighter displays. The iPod business was continuing to exhibit rapid growth The Personal Computer Industry In 2000 Sales of PCs had fallen for the rst time ever in 2001, it was due to a price war with local or unbranded computer that often market their products at very low compared to other computers from large companies. But the growth path had soon been resumed. So that in that period a lot of vendors who perform consolidation by acquiring other vendors, as happened between Hewlett-Packard with Compaq Computer (2002), Gateway with eMachines (2004), and Lenovo with the PC business of IBM (2005). It is committed with the intentionto streamline their production and lowering prices to increase sales.