74 / 2024-04-18 21:49:24

Valley of Innovation Death: The Optimal Platform Selection Strategy for Hardware Devices

hardware device; software platform; platform selection strategy;

The thriving sale of hardware devises (e.g., mobile phone and personal computer) inevitably linked to the unlimited possibilities with software platform. The empowerment of the software platform consisting of system and market greatly enriches the resources of the system and increases the functionality of the hardware devices. The mode of “hardware device + software platform” has become increasingly popular and has been adopted by almost all mobile phone manufacturers. As expected, there are typically two ways to integrate hardware devices with software platform, developing first party platform and introducing third party platform. However, developing first party platform seems extremely challenging. Therefore, regardless of cost and technology, we intend to investigate the failure of first party platform from the perspective of information system design and operation management. To address above questions, we build a theoretical analysis model of developers, consumers and a hardware device manufacturer who intends to transfer to “hardware device + software platform” mode. The company could transfer by developing its own platform and introducing third party platform. The results indicate that the decision to develop a first-party platform is controlled by threshold and envelope effects. The compatibility decision will motivate enterprises to move to first-party platforms, but the existence of the valley of death makes enterprises reluctant to move to first-party platforms. Assisted development is an effective means of escaping the valley of death, but assisted promotion does not help enterprises break through the valley of death, but instead deepens the valley.