The impact of platform update interval on platform diffusion in a cooperative mobile ecosystem

In a mobile ecosystem, the platform provider has a huge influence on other stakeholders. The platform provider, which is to say the provider of a smartphone operating system, aims to grow its ecosystem sustainably by attracting various stakeholders such as users and application developers. Periodic platform upgrading is one of the effective strategies for appealing to potential participants as well as existing stakeholders. However, the diffusion of an updated platform is ineffective in a cooperative mobile ecosystem where a manufacturer modifies a platform released as open-source software on its smartphones. Even if the platform provider releases an updated version, users are not able to install it on their smartphones unless the manufacturer of those phones provides a follow-up update for it. Therefore, the platform provider should consider the response of the manufacturer to a follow-up update when it makes its decision on the platform update interval. This paper models the effectiveness of platform diffusion with respect to the platform update interval in consideration of the manufacturer’s decision mechanism. In the model, the manufacturer provides a follow-up update when the benefits of increasing repurchases exceed development costs. The application of the proposed model is illustrated with parameters derived from a current mobile ecosystem. Further, a sensitivity analysis is conducted to analyze the impact of those parameters on the effectiveness of updated-platform diffusion.