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(Explanation using financial theory) If they don't get in now, it will be harder to do so later when profits in that market increase. If they do get in now, b
by meric 14y ago
(Explanation using financial theory)
If they don't get in now, it will be harder to do so later when profits in that market increase.
If they do get in now, but the market's profits do not increase, they can choose to back off.
The value of the option to stay in the market later may exceed the cost of entering the market now.
- pinaceae 14y agohow exactly will profits increase in a commodity market like the smartphone one? apple and samsung make profits - who else? which margins? tablets I would understand, no mobile carriers to worry about, lots of room in enterprise to push into. apple is making great inroads right now - but no one else. android in the enterprise is DOA, ms surface not there yet.
- meric 14y agoI wasn't the one doing the market research, but they could have been thinking as developing countries grow economically their people are more likely to buy higher end phones. More people buying smart phones = more money in the market. Platforms like iOS have network effects (i.e. App Store). Also people with a $500 iTunes library is less likely to buy another phone. These factors could be ways that make it harder to enter the smart phone market later on as other market players become more entrenched.
- deleted 14y ago[deleted]