Also this article about the Apple response at the time[1]. I think two factors helped hugely with the adoption of Win95 and the surge in popularity of the PC over Macs at the time. One was mainstream adoption of the recently arrived Pentium CPUs. The other was the collapse in memory prices in 1996, which had been very expensive for many years. Now PCs had an OS that could take full advantage of these capabilities and the price of a powerful computer fell dramatically. This must have hammered Apple's margins.
[1] http://www.cultofmac.com/386189/how-apple-responded-to-the-r...