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One of the secrets to maintaining a thriving business � being able to recognize when it needs a fundamental change.
This article was first published in the December 2008 issue of Harvard Business Review.
- Sales Rank: #66185 in Audible
- Published on: 2008-12-11
- Format: Unabridged
- Original language: English
- Running time: 32 minutes
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By Loyd Eskildson
In three years the iPod/iTunes combination became a nearly $10 billion product line, accounting for almost 50% of Apple's revenue. Market capitalization jumped from around $1 billion in 2003 to over $150 billion by late 2007. Apple essentially gave away the low-margin iTunes music to lock in purchases of the high-margin iPod.
Retail discounters such as Target and Wal-Mart now account for 75% of the total valuation of the retail sector, low-cost U.S. airlines have gone from nothing to 55% of the market value of all carriers.
Breakthrough products rarely emerge from established businesses because a radically new product usually needs a new business model.
(Originally published in the December, 2008 HBR.)
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