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.