New competition context in the mobile communications industry?: Competing through the iPhone

Abstract

Mobile communications industry has notably evolved in the last years. With the 3G take-off, smartphones have emerged as a new strategic weapon for the operators. This seems to change the competitive environment in the industry. In this paper, we theoretically elaborate on the idea that mobile service providers have the possibility to generate value by commercializing the iPhone. In doing so, we build on the resource based view of the firm and on the existence of switching costs. We advocate that the value generation process through the iPhone rests on its scarce and difficult to imitate conditions, as well as in the switching costs it generates that go beyond the traditional ones in the industry. Our research presents important implications for the operators’ strategy and for the regulator.