The major point in Clayton Christensen's book is that existing/old companies are way too used to high margins (and low/median volume) on their products. Think mainframe computer vendors versus PCs with 64 KB ram: it requires a different kind of company to survive on a Dell margin than on a mainframe margin. Christensen's point is not that new technologies requires new skills, as (technological) skills are much easier to get than to transform a company financial structure/culture.<p>Apple was used to high margins and low volume. Steve improved the product selection when he returned by simplifying it and thus reduced costs, something very few companies are able to. He made it focus, and made it able to produce things cheaper. This was the most important change of Apple that he made.<p>Both iPods and iPhones started out as low volume / high margin, and as such fitted very well into how Apple operated.<p>Nokia has lower margins, so in theory they should have been much more likely to get the mp3-player marked (if they had ever tried). Funny Apple should be able to undercut a company that has lower margins. But Apple was able to reduce costs. So therefore Apple got to keep the market share instead of loosing it when the market prices went down. Had the iPod still been the $500 mainframe-like price, Apple would have had Mac-size share of music players today (single-digit percentage) instead of the lions share.<p>And Apple (i.e. Steve Jobs) has 2 very important qualities that cannot be copied even if you have all the money of Microsoft:<p>a) good connections to the music industry so he could get iTunes Store at a time where e.g. MS failed to get deals as good as Apple's. He had <i>the trust</i> of music executives. You cannot buy trust, only temporary friends, and as Machiavelli told us, no friend is as untrustworthy as the one you buy for money.<p>b) taste. Look at how badly the US car makers have done after they lost the taste they had in the 50's and 60's. Producing cars more cost effective is much easier than getting the board to hire a CEO with taste. Most car buyers prefers to pay for good design more than for functionality, so when the US cars lost the "wow" factor, then they were delegated to the Dell end of the scale and they have trouble building cars at this price level without loosing money. Taste is what made OSX, iPhones and iPads "just work" and look beautiful at the same time instead of being just a Windows Vista lookalike. Blond with brains and money.<p>And Apple has Tim Cook to run the operations. So they could lower the price as the market price went down. The competitors can't even sell their iPad killers for <i>significantly</i> less than the iPad (and they don't even have an app store). Practically same price for less product is not how you dethrone the market leader.<p>Everything comes from the people you have. That is the fundamental competitive advantage that Apple has.