The Role of Value Networks in the Design of Mobile Platforms

Abstract

Unlike the simple mobile voice service, which is normally designed and developed by the telecom itself, the development of mobile data services and platforms, due to their complexity, usually requires a collaboration and cooperation amongst many actors within and outside the mobile telecommunication industry such as mobile network operators, content providers, content aggregators, payment gateways, regulatory commissions, and others. The actors usually form the so-called value network in which each actor complements others and adds important value elements to the final value proposition given that actors have different knowledge domains, backgrounds, and expertise. Contrasting value chains where the relationships amongst different parties are to some extent simple and linear, the relationships linking actors in value networks are mainly complex and non-linear, and such relationships had led to a shift from forming value chains to creating value networks in many digital economies such as the mobile telecommunication industry. Although it is argued that designing powerful value networks is critical to the success of mobile platforms, very limited research can be found on explaining and proving this argument. As such, this chapter intuitively utilizes a methodical approach to explain the role of value networks in the design of successful mobile platforms. This chapter demonstrates, through the case of iPhone, how a powerful and well-designed value network is a critical enabler of innovations in the mobile telecommunications industry. Further, the chapter argues that cohesion, fitting network-mode, uniqueness, and dynamicity are four key value drivers of powerful value networks.