ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Technology Diffusion and Competition in the Smartphone Industry

The fastest-growing technologically competitive industry, which was first revolutionised by Apple and later by Google’s Android platform is looked at. The credit for the growing competitiveness in this industry goes largely to the Android platform as it opened markets for existing, new, and low-cost manufacturers. This area of research is noteworthy, given the growing competitiveness, as it reflects the firms’ action in this industry associated with development that can provide a relative advantage for capturing the market share. The purpose of this article is to show how the technology diffusion leads to change in the market structure and strengthening of competition under incomplete market information.

The process by which a new idea or new product is accepted by the market is called diffusion. In the case of technology-driven industry, this basically means the spread of applications/usage, technical information and know-how, and the subsequent adoption of new technologies and techniques by the agents. In numerous cases, diffused technologies are neither novel nor certainly advanced (though they are often new to the consumer), and they may be acquired from a variety of sources. ­Apple, Google, Microsoft, Samsung, Nokia, Intel, Qualcomm and hundreds of other small and large firms build hardware and software products as well as the application and offer a variety of services that in one form or another ­result in the diffusion of technology in the smartphone industry.

In our analysis phase, hardware techno­logy becomes more or less standardised and “standard wireless Internet configuration is well developed.”1 This complementary technology development in conjunction with the accessibility of the substitutable ope­rating system at low cost provides oppor­tunity for expansion of the smartphone market to wider audiences. The reason for success is not a unique formula; however, it does combine some common ­elements. Similarly, in the smartphone industry, market success is a combination of “economies of scale, cost advantage, differentiated product features, superior technology, customer loyalty, and brand name.” For Apple, the last four components worked when iPhone was released; on the other hand, Samsung required combination of all these! Apart from that, an added advantage Samsung holds is in terms of adaptability of various platforms. However, for Nokia, not all these combinations worked. The failure can be associated with an improper mix of combination, high staff turnover, redundant acquisition or decision and a weak cost structure, which means outlays are high in comparison to their competitors.

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Updated On : 30th Jan, 2021
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