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struggling financially. Steve Jobs turned the sinking company around by focusing on only twocomputer models (one laptop and one desktop) in each of two market segments (the professionalmarket and the consumer market) as opposed to offering dozens of non-differentiated productswithin each segment. This streamlining of its product lineup enhanced Apple’s strategic focus. Evenso, the outlook for Apple was grim. Jobs believed that Apple, with less than 5 percent market share,could not win in the personal computer industry where desktops and laptops had becomecommoditized gray boxes. In that world, Microsoft, Intel, and Dell were the star performers. Jobsknew that he needed to create the “next big thing.”3A Guiding PolicySecond, Apple shifted its competitive focus away from personal computers to mobile devices. Indoing so, Apple disrupted several industries through its product and business-model innovations.Combining hardware (i.e., the iPod) with a complementary service product (i.e., the iTunes Store)enabled Apple to devise a new business model. Users could now download individual songs legally(at 99 cents) rather than buying an entire CD or downloading the songs illegally using Napster andother file-sharing services. The availability of the iTunes Store drove sales of iPods. Along with risingsales for the new iPod and iTunes products, demand rose for iMacs. The new products helpeddisrupt the existing personal computer market, because people wanted to manage their music andphotos on a computer that worked seamlessly with their mobile devices. Apple then leveraged the