Think of music players and music content. We have two leading firms here, Sony and
Apple and both of those are clear competitors because they both sell
portable music players. Right?
So you've got the Sony MP3 players, you've got Apple's iPod, iPhone, and so
on. So clearly they are substitutes when it
comes to music listening devices. But at the same time they were also
complementers in a very specific way. Namely that the subsidiary by Sony
dealing with content, with music, Sony music, provides music content for use in
the Apple iPod, or the iPhone. So this means that the two produce
complements as well as producing substitute products.
This means two things. It means on the one hand that Sony
producing more music is good for Apple, right.
So the more content there is the better it becomes for Apple
to sell the iPod or the iPhone, but at the same time, Apple's iTunes store is also
an important sales platform for Sony's music content.
So that means that the iTunes store is an important complement for the music
content by Sony. So here, complementary and conflicting
interests are present in the same set of firms.