Market power Flashcards
Are there not substantial switching costs which could demotivate users going to other smartphones?
1) There needs to be an attempt of quantifying or measuring the switching costs, in particular of moving apps, purchases, or user data across platforms. Mere statements of high switching costs between smartphones is not enough.
2) Switching costs have declined over time. For example, users can easily access their content on different platforms by using an account that they can login. Moreover, many applications function in a cloud service that can be accessed across devices. In addition, users can easily switch between devices through certain mechanics. For example, Apple has developed an app allowing easy movement from Android to iOS. From iOS to Android, one can use the service of Google Drive to transfer data.
3) For example, with regard to streaming services, users can easily switch through a personal account and acces their own playlists, settings, friends, personal recommendations, etc. Streaming providers such as Netflix and Spotify even promote it as an essential aspect of its services that users can benefit from cross-platform functionality.
Is there not a lack of countervailing buyer power?
1)
2) one must also place this in the context of increasing competition between ecosystems for the most successful developers for having a certain app.
Is there not a lack of potential competition?
1) mobile platforms such as smartphones face potential competition from the Internet of Things (expected to have 125 billion connected devices by 2030), the rise of wearables technology (including smartwatches and smart fitness trackers; expected to have 303 million devices shipped by 2024) and 5G connecting more devices to the internet, leading to both new and more used app distribution channels competing for the market. In addition
2) The increasing use of PWA’s.
3) The expansion of niche app distribution channels into a wider range of apps also constitutes potential competition : For instance, Epic Games store, which originally only focused on game apps, has started releasing non-game apps, including Spotify to its 100 million users.
