Economics and Value of Information Systems


This research empirically analyzes seller’s product portfolio strategy in the mobile application (apps) market. We use crosssectionaldata on the most downloaded application rankings in the Apple App Store to examine the impact of app portfoliostrategy on sales performance. We find that app portfolio diversification is positively correlated with sales performance. Wealso find that sellers who offer a combination of free and paid apps have higher sales performance than those who deliverpaid apps only. Furthermore, the results show that sellers with scale advantages compete differently from sellers in the longtail. These findings have implications for theorizing about product portfolio management in the emerging mobile app storemarkets.