I've wondered that too... When Jobs came back, he drew four quadrants along two axes: pro/consumer and laptop/desktop. The product line was then reduced to an offering in each quadrant. It was easy to understand what you should look at when going to shop.
But there are a couple structural issues with this model that have made it hard to sustain.
The first is that it can represent money left on the table.... a sort of quantization error induced by the product line. Maybe there are worthwhile markets that don't spring for the professional line, but still want something more than the basic consumer line. This creates something of a temptation to try to address those markets.
The second structural issue is that the four quadrant model is based on saying no to ideas that might come from good people (or at least people entrenched in the corporate bureaucracy). Maybe doing this a few times is easy, but the more creative your organization, the more often you'll have ideas that will be difficult to fit into whatever product line strategy you've put together.
But there are a couple structural issues with this model that have made it hard to sustain.
The first is that it can represent money left on the table.... a sort of quantization error induced by the product line. Maybe there are worthwhile markets that don't spring for the professional line, but still want something more than the basic consumer line. This creates something of a temptation to try to address those markets.
The second structural issue is that the four quadrant model is based on saying no to ideas that might come from good people (or at least people entrenched in the corporate bureaucracy). Maybe doing this a few times is easy, but the more creative your organization, the more often you'll have ideas that will be difficult to fit into whatever product line strategy you've put together.