This document discusses competition on mobile application markets. It describes how mobile application stores operate as platforms, connecting app developers and users in two-sided markets. The growth of these markets is driven by network effects that increase the value of the platform as more users and developers participate. The document outlines the current state of the iOS and Android markets and opportunities/challenges for different players like platform vendors, smartphone manufacturers, and app developers. It concludes that competition will increasingly focus on software, user experience, and contextual mobile apps that provide new opportunities for developers.

1. 以平台為基礎的競爭以平台為基礎的競爭 -- 以行動應用市集為例以行動應用市集為例
Competing on Platforms-A Case of MobileCompeting on Platforms-A Case of Mobile
Application MarketsApplication Markets
陳德釗陳德釗
助理教授助理教授
國立中央大學企業管理學系國立中央大學企業管理學系
November 8, 2010November 8, 2010
Department of Transportation Technology and Management
Kainan University

2. OutlineOutline
 IntroductionIntroduction 前言前言
 Competing on PlatformsCompeting on Platforms 以平台為基礎的競爭以平台為基礎的競爭
 Mobile Application MarketsMobile Application Markets 行動應用市集現況行動應用市集現況
 Opportunities and ChallengesOpportunities and Challenges 機會與挑戰機會與挑戰
 ConclusionsConclusions 結論結論

3. Competing on PlatformsCompeting on Platforms
 Credit card, PC OS, Media, Smartphone OS,Credit card, PC OS, Media, Smartphone OS,
application store/market for smartphones.application store/market for smartphones.
信用卡、個人電腦作業系統、雜誌信用卡、個人電腦作業系統、雜誌 // 報紙報紙、、智慧型手機作業智慧型手機作業
系統、智慧型手機的軟體應用市集系統、智慧型手機的軟體應用市集
 All these business can’t grow withoutAll these business can’t grow without supports fromsupports from
other complementary players.other complementary players.
上述這些業務的成長皆須仰賴具互補性的對象上述這些業務的成長皆須仰賴具互補性的對象 (( 廠商廠商 ,, 客戶客戶 //
消費者消費者 )) 的存在的存在

4. Competing on PlatformsCompeting on Platforms
 What is a PlatformWhat is a Platform 何謂平台何謂平台
 Two-sided/Multiple-sided marketsTwo-sided/Multiple-sided markets 雙邊雙邊 // 多邊市場多邊市場
 Network effectNetwork effect 網路效應網路效應

5. Competing on PlatformsCompeting on Platforms
 What is “Platform”?What is “Platform”?
“…“…an evolving system made of interdependent piecesan evolving system made of interdependent pieces
that can each be innovated upon” (Gawer &that can each be innovated upon” (Gawer &
Cusumano, 2002)Cusumano, 2002)

6. Competing on PlatformsCompeting on Platforms
 Two-sided/Multiple-sided MarketsTwo-sided/Multiple-sided Markets
““....markets in which one or several platforms enablemarkets in which one or several platforms enable
interactions between end-users, and try to get the twointeractions between end-users, and try to get the two
(or multiple) sides “on board” by appropriately(or multiple) sides “on board” by appropriately
charging each side.” (Rochet & Tirole, 2006)charging each side.” (Rochet & Tirole, 2006)

7. Competing on PlatformsCompeting on Platforms
 Network effectNetwork effect
“…“…a change in the benefit, or surplus, that an agenta change in the benefit, or surplus, that an agent
derives from a good when the number of other agentsderives from a good when the number of other agents
consuming the same kind of good changesconsuming the same kind of good changes.”.” ((
LiebowitzLiebowitz & Margolis, 1998)& Margolis, 1998)

8. Mobile Application MarketsMobile Application Markets
Source: http://www.asymco.com/2010/11/03/what-do-you-have-to-believe-for-an-android-dominated-future/

9. Mobile Application MarketsMobile Application Markets
Source: http://www.asymco.com/2010/11/03/what-do-you-have-to-believe-for-an-android-dominated-future/

10. Mobile Application MarketsMobile Application Markets
Source: http://www.booz.com/media/uploads/The_Rise_of_Mobile_Application_Stores.pdf

11. Mobile Application MarketsMobile Application Markets
Source: http://www.booz.com/media/uploads/The_Rise_of_Mobile_Application_Stores.pdf

12. Mobile Application MarketsMobile Application Markets
Source: http://www.research2guidance.com/global-app-developer-survey-android-overtakes-apple-and-offers-the-highest-business-potential-in-2013-of-all-mobile-platforms/

13. Mobile Application MarketsMobile Application Markets
Source: http://www.research2guidance.com/6-major-trends-shaping-the-smartphone-app-ecosystem-in-2010/

14. Mobile Application MarketsMobile Application Markets
Source: http://www.booz.com/media/uploads/The_Rise_of_Mobile_Application_Stores.pdf

15. Opportunities and ChallengesOpportunities and Challenges
 For platform vendors-For platform vendors-
““Chicken vs. Egg” question:Chicken vs. Egg” question: smartphones and/orsmartphones and/or appsapps
first?first?
Distribution agreement for publishing apps.Distribution agreement for publishing apps.
 For Smartphone manufacturers and softwareFor Smartphone manufacturers and software
developers-developers-
Roadmap of Mobile OS platforms:Roadmap of Mobile OS platforms: version requirement,version requirement,
compatibility across different versionscompatibility across different versions
Pricing mechanisms:Pricing mechanisms: Free apps or paid apps (for softwareFree apps or paid apps (for software
developers)developers)

16. ConclusionsConclusions
 Mobile OS platform and smartphone bring up newMobile OS platform and smartphone bring up new
arena both for operators and software developers.arena both for operators and software developers.
行動裝置的作業系統和智慧型手機的出現為電信營行動裝置的作業系統和智慧型手機的出現為電信營
運商與軟體開發業者提供新的戰場運商與軟體開發業者提供新的戰場。。
 Mobile phone manufacturers, telecom operators andMobile phone manufacturers, telecom operators and
Software developers have to decide which platformsSoftware developers have to decide which platforms
they want to play and manage their choicesthey want to play and manage their choices
appropriately.appropriately.
手機製造商手機製造商 ,, 電信營運商和軟體開發業者必須選擇電信營運商和軟體開發業者必須選擇
他們所要投入的平台並適當地經營他們的選擇他們所要投入的平台並適當地經營他們的選擇

17. ConclusionsConclusions
 Contextual based, expandable mobile applicationContextual based, expandable mobile application
software would be a new growth opportunity forsoftware would be a new growth opportunity for
software developers.software developers.
具當地特色與擴充性的行動應用軟體，將為軟體開具當地特色與擴充性的行動應用軟體，將為軟體開
發業者提供新的成長機會發業者提供新的成長機會。。
 From hardware based competition moves intoFrom hardware based competition moves into
software-, user experience-based competition insoftware-, user experience-based competition in
mobile servicemobile service
從硬體的競爭轉向以軟體和使用體驗為主的競爭從硬體的競爭轉向以軟體和使用體驗為主的競爭

18. Thanks for Your Attention!Thanks for Your Attention!
Der Chao Chen
derchao.chen@gmail.com