Proceedings of Eurasia Business Research Conference
16 - 18 June 2014, Nippon Hotel, Istanbul, Turkey, ISBN: 978-1-922069-54-2
Application Store Business Model Analysis for
Taiwan’s Mobile Operators
Juite Wang
Before Apple Inc. launched its App Store on July, 2007, customers only
could use mobile content services or mobile value-added services (VAS)
from mobile operators. During that time, mobile operators almost dominated
the whole market and had huge profits. Later, the whole mobile application
ecosystem has greatly been changed after the launch of App Store. App
Store not only created a new and innovative business model but also
brought enormous profitable opportunities. Therefore, mobile operators
have started adopting the application store business model themselves to
enhance their revenue and subscriber base. However, they do not retain
their dominant positions and competitive advantages in the mobile
application industry as before. The challenge remains for them to find a
successful strategy and provide meaningful differentiation in an increasingly
competitive mobile application store market.
This research considers the app store’s application service as a value
network, where different network actors – mobile operators, developers,
and end-users – have to work together to co-produce the value. The aim is
to develop a system dynamics methodology to analyze dynamic forces and
interactions among them to help mobile operators understand the dynamic
behavior of app store services, while determining an appropriate
competitive strategy under the different scenarios.
The results show that mobile operators could consider the following
strategies to help attract more customers and application developers: 1)
lowering or even removing developers’ registration fees, 2) improving
application review process to provide high quality applications, 3) providing
applications with location-based services or local contents, 4) increasing
compatibility with several OSs, 5) increasing the revenue-sharing ratio to
developers, 6) investing on incremental innovation services, and 7)
changing the application store’s existing business models.
Track: Management
Keyword: Application stores, System dynamics, Mobile application services,
value networks, service science
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Dr. Juite Wang, Professor, Graduate Institute of Technology Management, National Chung
Hsing University, 250 KuoKuang Road, Taichung 402, Taiwan, R.O.C.,
E-mail: rdwang@nchu.edu.tw, Tel: +886-4-22840547 Ext.605, Fax: +886-4-22859497