Economic and business perspectives on smartphones as multi-sided platforms

• Our study provides a comprehensive analysis of the evolution of the smartphone industry from the perspective of multi-sided platform theory.
• It analyzes the various strategies that mobile operating systems have relied on to solve the chicken-and-egg problem at the starting point.
• On the basis of survey evidence it also examines the approaches that mobile platforms have adopted to sustain momentum with consumers (users).
• Sustaining momentum with users has often required that the platform engage a variety of other customer types; thus, our study also analyzes the way in which mobile platforms have interacted, for example, with network carriers, third-party app developers, and advertisers.
• Finally, our study also provides an interpretation of the relative success of Apple׳s and Google׳s mobile platforms.

We interpret mobile operating systems such as iOS and Android as multi-sided platforms that serve a variety of “customers,” including consumers (users), handset makers, network operators, app developers, advertisers, and chip manufacturers. After reconstructing the history of smartphones, we explore the variety of business models that operating system owners or sponsors have implemented, and highlight their implications for the relationships between platform owners/sponsors and customers. Next we focus on those dimensions of the smartphone experience that consumers declare they value the most, namely network quality, the features of the operating system itself, and the selection of apps available for each platform. We study how different mobile operating-system owners or sponsors have managed to innovate in these various dimensions, often by engaging other customer types. In the concluding section we rely on the insights derived from multi-sided platform theory to analyze the reasons why two mobile platforms—Apple׳s and Google׳s—have been able to displace various incumbents.