Catch-up and the entry strategies of latecomers: Chinese firms in the mobile phone sector

Abstract

Abstract As interfaces between human beings and the digital world, mobile phones have evolved from relatively simple devices (e.g., feature phones) to complex products (e.g., smartphones). Many firms in emerging countries such as China have successfully entered the mobile phone sector. A research question that emerges from the evidence on China is whether the entry strategies of these catching up firms have been affected by the introduction of smartphones. In order to investigate this question, the article follows the methodology of evolutionary theory and history-friendly models. It first examines historically the various strategies of the Chinese entrants in the mobile phone sector. On the basis of this empirical analysis, it then develops appreciative theorizing on the factors that have affected the catch-up entry strategies. Our results show that the successful catch-up entry strategies differ depending on the sectoral environment. A technology-driven strategy is more appropriate when there is a market sheltered from competition, so that technological capabilities can be accumulated; on the contrary a marketing-driven strategy is more appropriate when standardized technological solutions become widely available. The article contributes to the catch-up literature by identifying a new entry strategy and by pointing at the role of the sectoral environment, and to the sectoral innovation system literature by addressing the catch-up strategies of latecomer firms under different technological, industrial structure, and market conditions.