Andreu Castellet Universidad de Murcia

Juan Miguel Aguado Universidad de Murcia

Inmaculada Martínez Universidad de Murcia

The new players that changed the rules and the

game itself: how Apple and Google transformed

the content distribution business

Internet becomes mobile u  1,224 billion connectable devices sold in 2012 Tomi Ahonen Consulting, 2013

u  695 million smartphones sold Tomi Ahonen Consulting, 2013

u Not included

u  100 billion app downloads 2010-2012 Svanberg, 2013

u  The biggest expectations in consumer goods come from mobile technologies

The growth of the mobile market

215 million smartphones sold

in 2009

695 million smartphones sold in 2012

Source: Tomi Ahonen Consulting, 2013

The growth of the mobile market

215 million smartphones sold

in 2009

695 million smartphones sold in 2012

Nokia and RIM have 64% of the market

Google and Apple have 87% of the market

Source: Tomi Ahonen Consulting, 2013

Our research questions u How have they developed their platforms in order to achieve

market hegemony?

u Have Google and Apple developed their respective platforms in equal ways?

u Has any of them copied the other in crucial steps of platform development?

The era of platforms

Devices

OSs

App stores

“Industry platforms are technological building blocks (that can be technologies, products or services), that act as a foundation on top of which an array of firms, organized in a set of interdependent firms, (sometimes called an industry “ecosystem”), develop a set of inter-related products, technologies and services”. Gawer, 2011

The generation of Apple-iOS ecosystem

All users registered

Paid and free apps

Direct sales and advertising revenues In-app purchase

Proprietary

On sale All retail channels

The generation of Google-Android ecosystem

Open-source Free license

Open Handset Alliance (OHA)

On sale All retail channels

Paid and free apps

Direct sales and advertising revenues In-app purchase

Loose control

A face-to-face view

Enabler Platform The platform owner controls many of the necessary assets to ensure the value proposition, but does not control the customer relationship Ballon & Van Heesvelde, 2011

Integrator Platform The platform owner controls many of the assets to ensure value proposition, and establishes a relationship with end-users. Entry of ‘third-party’ service providers is actively encouraged Ballon & Van Heesvelde, 2011

Different platform architectures

Core legacy business

IT hardware contents aggregation

Year of launch 2007 2008

OS proprietary, closed free, open

Devices licensing no yes

OS licensing no yes

Devices under leader’s brand

yes yes (< 1%)

Access to platform free, under registry free, no registry necessary

Relationship towards users

personal anonymous

Further lines of research

u How and why have the losers missed such a big business opportunity?

u Mobile platforms as private spaces of regulation

Our conclusions u  Both Google and Apple have gone through major internal and external

transformations to take advantage of their respective starting points: Google’s was an information utility one, while Apple’s was a hardware one.

u  With Android, Google has set up a platform based on cooperation of several diverse players, bets on a free OS financed by advertising revenues, and allows other players to keep their own relationships with customers. Apple bets on a tightly controlled platform, based on iOS, a proprietary system, and only allows others’ players, users included, if they accept Apple’s strict rules.

u  It doesn’t seem that anybody copied the other, although an ordinary user doesn’t notice big differences between them. However, their observe each other’s steps and tend to emulate some strong points of their opponent.

Thank you. Remarks are welcome

Andreu Castellet Universidad de Murcia andreu.castellet@um.es

Juan Miguel Aguado Universidad de Murcia jmaguado@um.es

Inmaculada Martínez Universidad de Murcia inmartin@um.es