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Open Platform Strategy in the Smartphone Industry


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Open Platform Strategy in the Smartphone Industry

  1. 1. Open Platform Strategy in theSmartphone Industry:A Comparison of Apple’s iPhone and Google’s AndroidStrategy and Competitive Advantage 6114Juan Pablo CordobaJessica HydeAnnabelle JohnsonNattaporn Yaemsaard MASAGUNG GRADUATE SCHOOL OF MANAGEMENT
  2. 2. What is an Open Platform? A marketplace provided by a business in order to facilitate consumer, developer, and manufacturer interactions Open Platform does not mean Open SourceOpen Platform Open Source• ex. Apple iPhone • ex. Linux• Programmers can create • Programmers can contributeprograms that function and interact code directly to thewith the platform or operating source, thus allowingsystem modifications and improvements to the original source code
  3. 3. Evolution of the Open Platform Strategy on Smartphones RIM (Research in Motion) first to dominate in Smartphone industry  Blackberry models originally released in 2002 iPhone 1st generation released in 2007  Debate regarding 3rd party developers Strategy now centered on creating most desirable platform via best applications  850 + software companies designing apps for Blackberry  250,000 + iPhone app developments kits downloaded  Applications to drive sale of handsets Google seeks to be a disruptive player with its Android Platform The first commercially available phone running Android is the T- Mobile G-1. By the end of 2009, Google expects 18 Android devices to be available via a variety of carriers
  4. 4. What is Apple’s Strategy for the iPhone? Be the first mover Create something that is difficult to emulate Make sure the platform is attractive to both users and developers Exclusive partnership with AT&T Use the online App Store to make money  Apple generates $60 million to $110 million in revenue per quarter from the App store* Allows software developer outside Apple to create applications  Inexpensive and rapid development of a variety of apps Make the iPhone a part of customers’ lifestyle  Design around customer needs and innovative technology  Apps can find restaurants, calculate tips, track weight loss *WSJ, Sept. 2009
  5. 5. The iPhone PlatformSuppliers UsersAT&T AT&T ConsumersThird-PartyApplicationDevelopers
  6. 6. How Successful is the iPhone?  17 Million iPhones have been sold  Over 85,000 applications  More than 50,000 developers  2 Billion App downloads CNET, Sept. 2009
  7. 7. What is Android? A Mobile Operating System A free software development kit is available to write apps for Android using the programming language Java
  8. 8. What is Google’s Strategy? Google provides a mobile phone platform that is easy and inexpensive for the entire industry to adopt “There are tons of devices out there... In the future, maybe each one of those will run Android” –Dave Bort, Google Android Team
  9. 9. The Android Platform Suppliers UsersMany Open SourceDevelopers Customers of ManyMany App Developers Phone CarriersSeveral Device Users of Many DevicesManufacturersSeveral Mobile PhoneService Providers Low Cost to Users
  10. 10. Google-Android Revenue Model Google Voice:  Unified communications service VoIP  Google as a phone provider Mobile Advertising  The market is expected to grow to over $24 billion by 2013* *ABI Research, 2008
  11. 11. Best Practices and Challenges5 Forces Buyers  Know your consumer  What do they care about? Price, openness?  Provide quality control and security  Consumers don’t like fraud, viruses  Watch out for PR fiascoes -i.e. Shaken Baby AppSuppliers  Attract developers, manufacturers  Keep these valuable resources happy or they’ll leave  Balance the needs of users and suppliers  6 distinct groups involved with Android
  12. 12. Best Practices and Challenges Cont’d5 ForcesNew Entrants  Be first  Breakthrough technology creates a barrier Rivals  Differentiate your product  Become the standard, become indispensibleSubstitutes  Build a sustainable growth strategy  Analyze the situation, make a plan, set goals  Capture value and maintain control
  13. 13. The Next Step: Open Innovation To be competitive, companies must:  Use external and internal ideas ○ Google bought Android ○ Apple acquired advertising company Quattro Wireless ○ Open Handset Alliance ○ Kraft, Starbucks have websites to gather ideas  Use external and internal ways to bring ideas to the market ○ Set up startup companies and licensing agreements ○ YouTube, Android Market, iTunes
  14. 14. Sources Chesbrough, Henry, Wim Vanhaverbeke and Joel West, eds., Open Innovation: Researching a New Paradigm. Oxford: Oxford University Press, 2006. Wingfield, Nick. “Sizing Up Apple’s App Store.” WSJ Online. 24 Sept. 2009. 3 Oct. 2009. apple%E2%80%99s-app-store. Farber, Dan. “What if Apple really opened up the iPhone?” CNET News 14 March 2008. 3 Oct. 2009. 80.html?tag=mncol;txt. “Mobile Marketing Revenue to Hit $24 Billion in 2013.” ABI Research. 14 Jan. 2008 Open Handset Alliance. “Open Handset Alliance FAQ”, Nov. 2007. 3 Oct. 2009. Rao, Leena. “When Will Apple Hit 1 Billion App Downloads?” TechCrunch. 10 Apr. 2009 app-downloads. Richtel, Matt, “Google: Expect 18 Android Phones by Year’s End", The New York Times. 27 May 2009.