Abstract

„App platforms” are electronic software distribution markets for mobile devices like smartphones or tablets. They have gained popularity after Apple launched its AppStore in 2008. Since then, app platforms have transformed the entire mobile communication industry including mobile network operators, device producers, software suppliers, content providers, advertisers, etc. Platforms (like AppStore) that intermediate between two distinct groups of customers connected through indirect network effects can be analyzed effectively using the theory of two-sided markets. The interdependencies of customers, platforms and developers require consideration of strategic issues not present in traditional models. These issues may pertain to all development phases, including platform design, launch and competition and thus, have an effect on existing and new business models in this sector. Economics literature on two-sided markets focuses on theoretical analysis, paying not much attention to managerial implications. Strategic management literature, on the other hand, rather provides practical guidelines. Within this paper, we discuss strategic issues arising in the app platform industry, combining these streams of literature. Based on a thorough analysis of the key stakeholders in the app platform industry (platform owner, developers, and users), we use our findings to provide management recommendations and discuss probable evolutions of the industry.

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