Abstract
The Internet of Things (IoT) technology trend is transforming business and society. This creates a need to understand strategic behavior in the consumer IoT, where firms tend to offer multiple platform devices, and new generations of devices are introduced frequently. We propose a novel analytical model that formalizes the concept of a multiplatform firm that offers a system of platforms, such as a smartphone, and a new platform device, such as a smartwatch, and orchestrates a multiplatform ecosystem. The analysis shows how a platform design decision, like offering a new standalone device, affects consumer choices and market outcomes. We identify two classes of new devices that matter, and show when a new platform device may disrupt the smartphone market. Moreover, we characterize conditions under which it is profitable for a vendor to make its new platform device look and feel more like its smartphone. Overall, we provide insights into how multiplatform firms differ from platform firms. We identify future research opportunities on the economics of consumer IoT and multiplatform ecosystems.
Publisher
Public Library of Science (PLoS)
Reference44 articles.
1. The Internet of Things—A survey of topics and trends;A. Whitmore;Information Systems Frontiers,2015
2. Demand effects of the Internet-of-Things sales channel: Evidence from automating the purchase process;P. Adamopoulos;Information Systems Research,2020
3. The transformative effect of the internet of things on business and society;J. P. Shim;Communications of the Association for Information Systems,2019
4. How smart, connected products are transforming competition;M. E. Porter;Harvard Business Review,2014
5. How smart, connected products are transforming companies;M. E. Porter;Harvard Business Review,2015