On October $5,2011,$ Steve Jobs tragically died of cancer. The recently retired CEO of Apple Inc. was a legend: he had changed Apple from a company on the verge of bankruptcy to one of the largest and most profitable companies in the world. Moreover, he had revolutionized several industries in the process. Few companies' successes were so closely identified with its CEO. Jobs's passing promised to usher in a new era at Apple. The new CEO, Tim Cook, had an extraordinary challenge: how to sustain Apple's current successes in computers, MP$3$ players, phones, and tablets, while taking Apple to the next level.

The company began as "Apple Computer," best known for its Macintosh personal computers $($PCs$)$ in the $1980$s and $1990$s$.$ Despite a strong brand, rapid growth, and high profits in the late $1980$s$,$ Apple almost went bankrupt in $1996.$ Then Jobs went to work, transforming Apple Computer into "Apple Inc." with innovative non$-$PC products, starting in the early $2000$s$.$ In fact, Apple viewed itself as a "mobile device company." $1$ By $2011,$ Macintosh revenues were less than $20\%$ of Apple's $$108$ billion in sales ${?}^2($see Exhibits $1$a through $1$c for financial information and net and unit sales$).$ Meanwhile, Apple's stock was making history of its own. Apple became the most valuable company in the world in $2012($see Exhibit $2$ for Apple's share price over time$).$

By almost any measure, Apple's accomplishments in the prior decade had been spectacular. Yet Cook knew that no company in the technology industry could relax. Challenges abounded. iPod sales, for example, had been falling for four straight years by $2012.$ At the same time, Microsoft was set to introduce Windows $8,$ which the company promised would challenge Apple's vaunted leadership in user interface. Even though Macintosh sales had grown faster than the industry in recent years, Apple's share of the worldwide PC market had remained below $5\%$ since $1997($see Exhibit $3$a for Apple's PC market share, worldwide$).$ Many also wondered if the company could thrive without Jobs. Cook, Jobs's former chief operating officer, had built Apple's formidable global supply chain, but he came to the CEO job with a very different skill set. Finally, would the iPhone continue its march to dominate smartphones in the face of growing competition from companies such as Google and Samsung? And would Apple's newest creation, the iPad, continue to dominate the tablet market, or would new competitors, ranging from Amazon to Samsung, steal share and drive down profits?