PCWhen Steve Jobs took over the reins of Apple in 1997, the company operated in the personal computer sector. The current examination of the computer industry using Porter's five forces model reveals multiple threats facing Apple. Within the sector, there is a strong threat of new entrants in the market. The parts used to build the PCs were priced affordably, making entry affordable for many different competitors. The case mentions that through standardization, PC manufacturers were able to significantly reduce their R&D funding. Additionally, standardization has made it difficult to differentiate between actual PCs. Apple was able to differentiate itself slightly through hardware quality and significantly through its proprietary operating system. They also began to differentiate themselves through the packaging of PC components with the release of the first iMac. Apple also faces a strong threat of rivalry in the PC industry. There are a lot of competitors, from Lenovo to Dell to Hewlett-Packard. Compared to these companies, Apple is a small company and only has a small market share of the industry. Domestically, industry growth is slowing as more than 60% of U.S. households already own a PC, but internationally there is an opportunity to mitigate some of the threat as growth is rapid . Thanks to the large number of suppliers and the standardization of parts, there is a low supplier threat to Apple. Where Apple runs a certain risk is with its processor producer, Intel. Intel is a large company and only competes with a few other companies in this particular industry, leaving Apple vulnerable to changes in the price of the PC's most expensive component. There is a threat of forward integration from the supplier...... middle of paper ......ber of buyers for all three products. In fact, Apple recently surpassed the 10 billion mark for music downloads from the iTunes Store, illustrating the massive number of buyers and purchases those buyers make on the iTunes Store. Overall, Apple currently has a strong strategic advantage in these sectors. While these benefits are important, they are not sustainable due to the R&D efforts of other companies and the idea that consumer electronics are becoming more of a consumer product rather than a luxury product. If Apple does not strive to maintain high barriers to entry with its powerful knowledge base and maintain rapid market growth by introducing more niche products, they can expect their competitors to are catching up technologically and potentially overtaking them due to their greater financial capacity to market their products.