Multiple standards and critical masses, and the formation of new industries

Jeffrey L. Funk

European Journal of Innovation Management, 2012, vol. 15, issue 1, 4-26

Abstract: Purpose - The purpose of this paper is to analyze standard setting and how a critical mass of users emerged in an industry in which multiple interface standards co‐exist and a critical mass of users was created multiple times. Design/methodology/approach - This paper is based on research conducted for almost ten years using the case study approach. Data were gathered through more than 100 interviews with Japanese firms and through analyses of published sources. Findings - The paper finds that growth in mobile internet services required agreements on multiple interface standards where some of these interface standards exhibited interdependencies and thus required integral design, while others have been built on top of these “basic” interface standards. Agreements on the former interface standards enable basic data connections between phones, services, and content and this required integral design. The latter interface standards connect the mobile phone with content and applications from other industries (e.g. music, video, publishing, broadcasting, and payment) and each critical mass of phones, services, and content for them partly builds from previously created critical masses. Research limitations/implications - The research focused on a single industry in a single country. Practical implications - This paper helps scholars and practitioners better understand how interface standards and critical masses for them emerge. Originality/value - This is the first paper to analyze multiple interface standards in a single industry and the emergence of a critical mass of users or complementary products for these standards.

Keywords: Interface standards; Network effects; Critical mass; Mobile phones; Mobile communication systems; Internet; Japan (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ejimpp:14601061211192816

DOI: 10.1108/14601061211192816

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