Even if the entrant were able to attain the needed capital, they would then incur issues such as
customer loyalty and switching costs. Currently, smart phone companies do a good job
integrating different aspects of consumers’ lives with their product, such as the iPhone
interacting with iTunes, iCloud, Gmail, etc. As noted earlier, without a 2 or 3-year contract
renewal, switching costs between smart phones is incredibly high. Smart phones companies
have achieved a level of customer loyalty as well as high switching costs that create another
large barrier to entry.
Even if the entrant were able to attain the needed capital, they would then incur issues such as customer loyalty and switching costs. Currently, smart phone companies do a good job integrating different aspects of consumers’ lives with their product, such as the iPhone interacting with iTunes, iCloud, Gmail, etc. As noted earlier, without a 2 or 3-year contract renewal, switching costs between smart phones is incredibly high. Smart phones companies have achieved a level of customer loyalty as well as high switching costs that create another large barrier to entry.
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