Given the analysis of industry dynamics, what must a PC firm do to make an economic return in this industry? Is Apple protected from these competitive forces in any way?

In 1997, Apple Computer was in deep trouble. The company that had pioneered the personal computer (PC) market with its easy-to-use Apple II in 1978 and introduced the first graphical user interface (GUI) with the Macintosh in 1984 was bleeding red ink. Apple’s worldwide market share, which had been fluctuating 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, on top of a $740 million loss in 1996. In July 1997, the cofounder of the company, Steve Jobs, who had been fired from Apple in 1985, returned as CEO. At an investor conference, Michael Dell, CEO of Dell Computer, was asked what Jobs should do as head of Apple. Dell quipped “I’d shut it down and give the money back to shareholders.”