Elmar Gerum, Philipps-University Marburg Insa Sjurts, Hamburg Media School

Industry convergence and the transformation of the mobile communications system of innovation ITS 15th Biennial Conference Berlin, September 7, 2004

• Elmar Gerum, Philipps-University Marburg

• Insa Sjurts, Hamburg Media School

• Nils Stieglitz, Phillips-University Marburg

Sectoral systems of innovation

Industry convergence: a taxonomy

The coming of the mobile Internet

• Product complementarity

• mobile communications
• Internet services

• Internet service vendors as new source of innovations

• Transformation of value net

• Standard-setting as key driver

• Access technologies
• Communication protocols
• Proprietary vs. open standards

• Interdependence of innovative activities in the value net

•  Towards a data-centric system?

The transformation of the value net

Strategic responses

• Europe: WAP standard

• Technology push approach to selection of technological opportunities
• Telco equipment vendors as key source of innovation
• Strategic alliance between technology producers
• Low appropriability conditions (open standard), revenues from handsets
• Low cumulativeness for technology users (incompatible to HTML)
• Low-powered incentives for other actors in the value net

Smart phones

• Smart phones as hybrid products

• Cell phone features (esp. voice)
• PDA features (esp. PIM)

• Indirect market entry by incumbents

• Nokia
• palmOne
• Microsoft

• Industry ambiguity

• New suppliers, competitors, customers
• Competition from separate products

• Cross-industry alliances to share capabilities

Conclusions

• Mobile communications industry undergoing transformation

• Industry convergence key concept to understand industry dynamics and business strategies

• (Industry convergence by technology integration)
• Industry convergence by product complementarity
• Industry convergence by product substitution

• Cross-industry strategic alliances primary response to industry convergence. Purpose differs according to convergence type:

• Resource-sharing
• Coordination

Thank you!