To lend credibility to its threat of a price war, Apple invests in extra capacity before Samsung decides whether to enter the tablet market. Apple’s profit as a monopolist decreases to $1.2 billion, a profit that is still higher than Apple’s equilibrium payoff in FIGURE 12.6. With this credible threat, however, if Samsung chooses to enter the market, Apple will choose to fight, earning $0.8 billion. Because Samsung will lose $0.5 billion under this strategy, Samsung will choose not to enter the market.