Most of us probably see others using and use smartphones on a regular basis, from communication, to games or browsing the web. And while the outside of each phone may be different, the operating system(OS) used to run the phones are going to be either Android or Apple. An interesting part about the smartphone market is that there are two different parts of it: the hardware market, and the software market. The smartphone hardware market is still competitive. On the other hand, the software market is in a an oligopoly with Google's Android and Apple's iOS making up over 90% of the market share.
These two companies were some of the first that put out smartphones and have remained at the top of the market. Since then, other companies have attempted to enter the smartphone OS market, such as Blackberry or Microsoft, but they all have either left the market or own only a small portion of it.
A large part of the barrier to entry into the OS market is simply the fact that it's a different OS. For an OS to become popular in the market, it is likely that there would need to be apps to attract new users to that OS, or that Android and iOS developers recreate their apps for the new OS. However, it's unlikely that a developer would want to spend the time and effort needed to make sure that their app runs on an up and coming OS that may never bring profit due to not having a large enough user base. For example, a customer may be turned away from a new OS due to a small handful of apps being available compared wide array of apps on Apple's app store. Finally, once the new OS has been created and may be competitive, it still needs to be put on to a phone by a hardware producer. And unless the OS producer is also the hardware producer, it may be difficult to find a company that is willing to take a risk on a new OS.
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The distinction you draw between software and hardware is really interesting and something I had not thought of before. One would think that people have a certain attachment to brand names as well which pushes competition away. I really enjoyed the commentary about how the OS system is able to control the market and bar entry. The OS industry seems unique in that you had to join market early because entry becomes very hard. Are there other instances of this in the market place? It seems like the situation is very unique in that developers- the consumers that make a certain software popular- are the reason why its hard for new competition to grow and contest existing software that Apple and Android push for.
ReplyDeleteAlthough I witness these things in everyday life, I never really think about it. Your post is very interesting because it is something we can all relate to. Although I knew Apple and Android dominate the industry, I didn't realize they made up over 90% of the market share. After reading this, I realized the effects of these companies on the industry. I see a variety of phones in stores, but never on the street. There are still companies producing great phones, but they will never see the light of day due to the oligopoly of this industry.
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