Apple is having problems overcoming the challenges facing it 
- because: Apple only has a 3% market share in the global PC market (www.nytimes.com)
- because: Apple's rivals have modified their products to work better with Apple's products in order to share its market
- because: e.g. Microsoft's Zune device also supports AAC has adopted a similar closed DRM model used by iPods and the iTunes store (www.zune.net)
- but: Apple Inc. maintain a steadily growing sales of their products in recent years
- because: Apple iPod is the biggest selling digital music player of all time (sold more than 100m) (Wikipedia contributors (2007) )
- because: Apple competes with large established companies
- because: Apple's Mac computers compete with Dell and other computer manufacturers
- because: Apple's software competes with Microsoft
- because: the iPhone competes with Nokia
- because: the iPod competes with Sony's Walkman
- because: iTunes competes with other music download sites such as Amazon
- because: Apple's online iTunes music store is suffering from illegal music sharing through the internet
- because: songs available on iTunes music store can be easily found and got for free from the internet, sometimes even few weeks before their official releases
- but: since 2004, the iPod has dominated digital music player sales in the United States, with over 90% for hard drive-based players and over 70% for all types (www.appleinsider.com)
References
./appleinsider.com/articles/06/05/24/ipod_how_big_can_it_get.html
./www.nytimes.com/2007/09/16/technology/16digi_af9e88e5.html
./www.xbox.com/index.html
Wikipedia contributors, "IPod," Wikipedia, The Free Encyclopedia, http://en.wikipedia.org/w/index.php?title=IPod&oldid=160258471 (accessed September 26, 2007). (http://en.wikipedia.org/wiki/IPod)