Bus ECO 360 Supply and Demand

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Supply and Demand 1 Supply and Demand � PAGE �4�

Supply and Demand

There have been days, since its inception, when Apple Computer looked like it would conquer the world. There have been other days, however, when corporate death seemed just around the corner. For years, Apple's future looked bleak indeed. In fact, in 1997, the company was on the verge of going out of business. Drooping sales, declining market share, and zero profits at Apple drained the confidence of investors. You know things are tough when good news is a big loss that was less than many expected. Things were so bad that in 1997, Apple's archrival, Microsoft, invested $150 million dollars in the struggling company. To many, it appeared that Steve Jobs (Apple's CEO) had sold his soul to the devil when he made the deal with Microsoft. Jobs knew, though, that something had to be done, because while there was plenty of supply of Apple's products, there was very little demand.

Jobs said at the time, "The investment is an attempt to revitalize Apple, which has seen sales of the Macintosh plummet and its market share implode."

During this difficult period, Apple's market share dwindled to below 2% of all PC sales. Michael Dell, CEO of Dell Computer, said in a Business Week Online interview dated April 6, 1997 that he would "never" take the job of running Apple. Dell went on to say, "We know how the movie ends. It's just a question of what happens in the middle. It's not to say that Apple's products aren't innovative or cool, but the economic factors here are so overwhelming, it's very hard for them to swim against that tide." The funny thing is that today, Michael Dell is the former CEO of Dell Computer and Apple...