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The success of Apple iPod has surprised its competitors, market analyst and investors
who had largely believed Apple was a niche player in the computer world. To be
successful in the mainstream mass market is unusual for Apple. Many people recognise
the Apple brand, but far fewer buy its products. Take the imac; this iconic stylish PC
was universally praised for making the desktop PC an attractive product rather than a
dull grey box. The imac is clearly different from other PCs and customers have to pay a
price premium for this, but few are willing to pay twice as much for a machine that
ends up doing much the same as any other PC.
Because of small scale of sale,profit margins are extremely small for
PCs; this is why it is difficult for Apple to produce any revenue from the
imac despite its success. Indeed, it is the iPod, which has delivered the
cash for Apple. Apple, perhaps best known for its Macintosh computers,
has relied on the iPod and sales of music from its iTune online music
store to make up for its lack of market gains in the highly competitive
PC market. The core business of PCs continues to shrink, with iPod and
iTunes driving its current revenue growth.