Executive Summary
Android platform exists in a multi-sided digital economy where its competitive success rests with critical mass adoption. The platform’s introduction was disruptive, affecting an existing model of high-end company-specific devices that brought critical mass to parent companies. With Android, a new business model emerged where free access, subsidized products, and ad-based app ecosystems flourished. This led to a critical mass adoption that accelerated crowdsourced platform development and services development for the platform. Given the trend, Android platform was an innovation that has turned into a platform for innovation. Despite its success, it has failed to sustain high earning margins for its respective business models and the mass-market plus low entry barriers, and low usage costs have become its institutionalized norms. Societies and economies build on the platform are now affected by this operational model as a limitation or opportunity for additional digital innovation and competitiveness.
Introduction
Firms are quickly losing their ability to control service user experiences by creating physical goods. With digital innovation, the product enters the market as innovation and continues creating new ways of handling business activities and doing more business such that its use becomes innovative by itself, sometimes ushering additional digital innovations. This essay aims to explain the nature and consequences of digital innovations and focuses on the Android platform. As a digital ecosystem, it has become successful. In analysis its growth, the essay will criticize the approach used for controlling and cultivating its innovation. The essay reviews literature on Android platform and theories of competitiveness in business as well as their application to business innovations in digital economies.
As a digital platform, Android destroys the conventional business logic that traditional market structures would provide. For example, it allows rival companies to compete and collaborate equally in their endeavors for crowdsourcing user-preference research. At the same time, Android uses the crowdsourcing element to generate new features and exert control over itself. The identity of creator and user fades in this relationship. The digital economy is driven by creation and consumption of digital products and platforms offering development and consumption opportunities. The platforms also serve as products. Mobile devices drive the digital economy by being the most used avenue for accessing digital media. Companies offering platforms and letting developers create apps for consumers facilitate the present mobile economy.
In the mobile digital economy, innovation happens at the platform being created to support the ecosystem, at the incremental development of the ecosystem to offer new functionalities, and at the consumer targeting app or development that is delivered using the platform. The digital economy grows with increases in avenues for accessing content. Innovations bring new channels for providing services. Ultimately, transactions happen in service exchanges on various levels with networks of buyers, sellers and users. As a multi-sided market, the biggest challenge for firm’s success is in bringing a critical mass to encourage all sides to come together and facilitate the substantive economic activity. For the Android platform, Google has allowed app developers and manufacturing companies to have free access so that users and developers are attracted to the platform (Ng 2014).
Conceptual Framework
With digital platforms like Android, there are two influences on their development. On one side, there are the stakeholders seeking to generate new approaches and features of the platform as a product or foundation for products. At the same time, there are other stakeholders seeking to moderate and regulate attempts to modify the platform and renew or correct its flaws. However, the roles played by the various stakeholders are fluid and can shift.
For innovators, the main issue of management usually controls. The digital ecosystem innovation provides relatively low barriers to entry in young markets, but significantly high entry barriers for mature markets. The Android platform started as an innovation in a young market. The rival platform, iOS, was still in its infancy. Compared to now, rival platforms are unable to keep up with either iOS and Android, the newest contender is Windows Phone. Nevertheless, the statement is only true when extended functionality of the platforms is in question. Otherwise, all platforms fundamentally do similar things and can technically compete on an equal basis (Manjoo 2014).
According to Pisano (2015), a strategy is nothing more than a resolve to ensure a coherent and mutually reinforcing policy or behavior persists. A good strategy leads to alignment of diverse groups in an organization. It clarifies objectives and priorities. It focuses efforts on development around the members of the organization or community.
Digital innovations thrive and grow into tangible economic and social solutions when they embrace a definite strategy. Otherwise, they would be business practices. At the same time, digital innovations have to be original in their system sense, in addition to being new in their functionality. Android platform was disruptive in that it presented an avenue to use an open source operating system to mobile platforms, allowing crowdsourced development, use, and control. Therefore, it would not act appropriately in conventional business processes. It needed a new business model. The idea of disruptive innovation was first presented by
Before Android platform, there was, there were blackberry world and Apple App Store that allowed the respective platform owners and the third-party business users to make money, selling apps to the platform’s users. When Google’s Android platform entered the market, it provides a new market for the same services that the incumbents were offering. Besides, it offered new users an affordable way of enjoying similar smartphone services at a fraction of the cost. It was an embodiment of platform formation’ of information technology. It became an ecosystem in a similar way to other digital innovation ecosystems that deliver derivative products and interrupt the status quo of incumbent market structures. Android platform eroded the profitability of the Blackberry World platform and the iOS platform. These were glued chains where users had to get platform ready devices from the specific vendor.
With Android platform, one could get the platform from dozens of vendors around the world with diverse physical device specifications. On the other hand, Android platform came as open source, allowing users general control of their devices beyond what the rival platforms offered. For example, Android platform users can install apps from other sources other than the Google PlayStore. In fact, phone vendors have gone ahead to replicate Google PlayStore with their independent stores to enhance their devices usability and perform their business specific functions for their user base.
Android platform is a core that runs under the Google Android OS platform. In the former case, only the core or engine is present, and any company running the platform has to find services to incorporate. With the latter, the key services, the infrastructure and the system for linking and interchanging users and creators are already there under the control of Google, the platform owner. Nevertheless, it remains open for modification.
Android platform gave Google a zero level operating capability to compete with Apple’s iOS. Google then created its bundled services, organized a network of manufacturers, and created the PlayStore to achieve dynamic capabilities at the first level. As such, it got a temporary competitive advantage regarding scalability, market reach, and control as well as opportunities for further innovation. At present, the Android platform has higher-level dynamic capabilities. Nevertheless, it still occupies the second position regarding earnings made by developers using the platform. It is a mass-market product with low prices while the number one platform is a premium market product with high prices. This is despite the presence of free apps on either platform. The competitive earning capabilities differ because of the user base, which is affected by mobile device prices (Perez 2015).
Findings and Analysis
The big companies using and developing the Android platform are institutionalizing it. In fact, the development of the platform as a Google project and product has presented norms on its development, adoption, and usage. For the app developer community, Android represents a target market for ad-supported apps while iOS presents a target for paid apps (Bell 2015). This is just one of the ways that the Android platform innovation was institutionalized by Google to conform to its ad-supported business model and is a testament of the institutional theory (Hargadon & Douglas. 2001).
The innovation brought by Android platform shocked the incumbents but is also accelerate its disruption. Already there are offshoots of the Android platform seeking to break aware from its innovation and control system to usher a new era of the phone and portable devices ecosystem. Microsoft recently collaborated with CyanogenMod to replace Google services on the Android platform made by CyanogenMod (Barrett 2015). While at first Android served as a gateway for Google’s entry into the mobile phone ecosystem, it is now a feature that lets rival companies expand their core services by replicating Google’s innovation strategies with other partners.
By disrupting the existing ecosystem and lowering entry barriers for new players, Android will be able to gain more users, thus becoming more competitive than the alternative options. However, its beneficiary will be distributed. Already predictions show that the platform will be leading in both smartphone and tablet markets (Malhotra 2014). It is also making forays into other devices, appliances and cars. Android’s model of being innovative while supporting significant innovations is a competitive advantage, but only to firms that can control outcomes and user bases. Google has been able to do that while Amazon, CyanogenMod and other companies have not yet acquired the user base that is critical to their competitive advantages.
Nevertheless, such businesses are Trojan horses that can be acquired to provide early entrants with significant technology and market access for competitive purposes (Spense 2015). Gaining entry into Android allows other companies to interact with its features and user community to gain insights that can aid in the improvement of other platforms and their innovativeness. In this regard, Android’s openness is becoming a disadvantage that can be exploited to undermine its incumbent supporters. Disruptions are not happening at large scale, but in small ways within the Android platform community.
Conclusions and Recommendations
Android platform defined new ways of achieving social structure under mobile phone uses. It continues to evolve and shape the way people interact with devices and activities that their devices can do. Android platform continues to usher new opportunities for service innovations. New forms of socio-economic exchange have emerged, and they will continue to arise as the platform matures.
The platform has transcended economic classes and regions in the world. As companies and communities take it as the best tool for early entrant access to new markets, others are using it as the last mile connection to their user base. The platform has transformed phones, tablets, android wear devices, smart TVs and cars into new tools of service delivery. It has disrupted traditional markets and created new ones.
There are opportunities for gaining competitive advantages, reacting to the market rivalry, dealing with threats of substitutes or new entrants in varied industries and markets. The platform is versatile, and it will continue to offer society new norms or strengthen existing ones. It will also continue liberalizing economic opportunities beyond country borders and social classes.
Like the internet, the Android platform is democratizing smart devices manufacturing businesses and consumer applications. It is now tested by Blackberry as an opportunity for recovering its business competitiveness by serving as a competitive resource that will let the business compete effectively in the smartphone market. Unfortunately, getting into Android platform only removes entry barriers (Savov 2015). Firms still have to gain other competitive advantages to increase their market share in their respective android-related businesses.
The first lesson, which also serves as a recommendation is that, in the disruptive stage of a digital innovation, firms have an opportunity to grow their competitive advantages with the growth of the innovation. They can find ways to control and manage the innovation such that it applies to their profit-making models or create new models for profitability. Once an innovation becomes institutionalized, it only offers limited opportunities such as removal of new entrant barriers. Managers should think about their competition regarding its level of disruption and stage of institutionalization.
Copying strategies will only work in the early stages. In the late stages, the best option would be to adapt to the innovation as part of competitive requirements for the particular industry rather than try to defeat the incumbent. However, new business models can still arise based on the incumbent digital platform that provides companies with distinctive advantages that grow their market share.
Another lesson is that firms should be ready to comply with the institutionalized norms of a given platform based on consumer behavior. They must also analyze their position concerning consumption as digital innovation tend to have multilayered consumption characteristics. For example, developers for the Android platform are consumers while app users are also consumers. Either way, firms entering a market based on a digital platform should try following its trends to limit their costs of research and development and quickly break even. In the case of Android platform, adaptation implies that firms should pick an ad-based business model or a free model with paid upgrades to appeal to Android’s largest user base.
Reference List
Barrett, B. 2015. Microsoft just took Android’s future out of Google’s hands. Web.
Bell, K. 2015. Google play now has more apps than Apple’s App Store, report say. Web.
Hargadon, AB & Douglas, Y. 2001. ‘When innovations meet institutions: Edison and the design of the electric light’. Administrative Science Quarterly, vol 46, no. 3, pp. 476-501, viewed 2015.
Malhotra, D. 2014. 5 trends that will dominate mobile app development in 2015. Web.
Manjoo, F 2014, This phone is great till it’s time to add apps. Web.
Ng, ICL. 2014. Creating new markets in the digital economy: Value and worth, Cambridge University Press, New York.
Perez, S. 2015. Revenue gap between iOS and Android app grows, thanks to China. Web.
Pisano, GP. 2015. You need and innovation strategy. Web.
Savov, V. 2015. Blackberry’s $699 Android gambit is too much too late. Web.
Spense, E. 2015. Microsoft’s trojan horse to undermine Android. Web.