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The personal computer industry grew rapidly since IBM brought PCs into market. The decreasing PC price and the increasing demand of oversea market drove this growth. However, the declining average selling prices (ASPs) made the gross margins of PC industry decrease substantially from early 1990s to early 2000s. HP and Dell, the leading companies in PC industry, both had an obvious downwards-sloping gross margin line during that period (Attachment 3). From 2009, new sub-products, such as mini netbooks and Ultrabooks, brought PC industry’s profitability back a little bit. Overall, the net profit margin of PC industry is very low, about 5% nowadays. An exception of the low profitability in PC industry is Apple Inc. The gross margin of Apple increased gently from early 1990s to early 2000s, and increased dramatically since 2006 (Attachment 3). From 1999 to 2011, the gross margin of Apple was around 40%, which is twice that of HP and Dell. According to our data in Attachment 1, products’ contribution to the total revenue in Apple has changed radically (Attachment 2). In 2004, revenue from Macintosh accounted for around 60% of the total revenue of apple, while in 2012, the contribution narrowed to 20%. On the other hand, the sales revenue from iPhone and iPad became the main contributors of Apple’s total revenue. We conclude that the booming market of the innovative products, iPhones and iPads lead to Apple’s high profitability from these data.

Attachment 1
Attachment 2

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Attachment 3

Gross Margins (%) |1997 |2000 |2003 |2006 |2008 |2009 |2010 |2011 | |Apple |21% |27% |29% |29% |35% |40% |39% |41% | |Dell |23% |23% |21% |19% |17% |18% |19% |22% | |HP |38% |31% |29% |24% |24% |24% |23% |23% | |

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