Abstract

A rapid growth of the mobile app market has been identified as a key driver of the successful proliferation of the mobile devices such as smartphones and tablet devices. In this paper, we identify the success factors that contribute to the sales of mobile apps, grounded on the word-of-mouth literature. While open innovation is generally accepted as an effective solution for traditional goods development, the optimal platform choice for app development is not yet justified. Given this controversy, we examine the optimal platform choice for app development from a consumer’s perspective. Our findings indicate that closed platform outperforms open platform in the mobile app market. Interestingly, the interaction effect turns to be significant, meaning that the impact of online rating on app sales is greater under open environment than under closed environment. This implies that consumers depend on ratings more heavily when search cost is higher in the open environment under which apps are published without going through screening.

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