Competition Of Open And Closed Mobile Operating System Platform Based On Two-sided Market Theory

Modern society has gradually transformed from the era of industrial economy to the mobile Internet era which rely on information and communication technology, Intelligent mobile terminal has become an important tool which consumers use to access the mobile Internet and enjoy a variety of applications and services. From the surge of mobile terminal shipments surge, we can see that mobile terminal equipment has become a battleground, and as a mobile terminal brain, the importance of mobile operating system is self-evident. In addition, because of the influence of cross network effect and scale economy, the platform based service and trade rules are more severe, and the choice of the closed and open competitive strategy is also attracting much more attention. In particular, the famous Apple’s IOS and Google’s Android mobile in the mobile operating system stimulate attention and discussion on the platform in the closed and open competition strategy of attention and discussionin recent years.Based on the theory of two-sided markets, this paper studies the competition of open and closed mobile operating system platform. This paper first introduces the concept, classification and the challenge of the two-sided market, and then introduces the research of the operating system based on the theory of the bilateral platform. Then, this paper expounds the theoretical preparation and research for object analysis:analyzing the two-sidedmarket attributes of the mobile operating system platform, which are the basic attribute of the bilateral market platform and the unique attributes of the mobile operating system platform. At the end of this paper, according to the analysisof the mobile operating system platform network structure and the market environment, with a market share of bilateral users (consumers and application developers) as measuring standard of competitive advantage degree and improving the HotellingModel, adding up the mobile terminal manufacturers, constructed the open and closed mobile operating system platform competition model, calculated the equilibrium state of the two kinds of mobile operating system platform for consumers and app developers market share and pricing,carried on the analysis to the equilibrium result, and gived the corresponding competition strategy suggestion.Through the analysis of the open and closed mobile operating system platform competition, the following conclusions are drawn:I the number of mobile terminal manufacturers in the two-sidedmarket determines the outcome of the open and closed mobile operating system in the resources of consumers and application developers. In view of the number of terminal manufacturers of closed mobile operating system platform, so when the number of mobile terminal manufacturers in the same submarket, open mobile operating system in the consumer and app developers’markets have a great advantage; when the number of open mobile operating system is very few, closed mobile operating system in the consumer and application developers’market have more advantages 2 closed mobile operating system platform benefit from the terminal hardware sold by their own company.3 when the externality between application developers and consumers is very big, the mobile operating system platform tends to give the application developers lower prices or more subsidies.4 closed type mobile operating system platform is more suitablefor the high-end consumers, while the open mobile operating system platform is more suitable for ordinary consumers.The innovations of this paper are as followed:This paper analyzes the competition of closed and open mobile operating system platform based on two-sided market theory, and combines the examples of IOS and Android to construct the network structure of these two types of mobile operating system platforms. In the model, different from previous studies ignored the market environment factors, this paper consider the market environment, and according to the closed type mobile operating system platform, adds up the profit model of sale of hardware and improves the Hotelling model with the influence of mobile terminal manufacturers on the utility of bilateral users (consumers and app developers).This paper alsoanalyse the mobile terminal hardware vendors and other complementary behavior, and as the ideal which resources on both sides of the platform consumers and application developers to measure the competition strength of the standard, analyzes the two competitive equilibrium results.Of course, there are some problems in the research of this paper:Firstly, the competition model of the closed and open mobile operating system is relatively simple. Secondly, in this paper, we assume that the number of mobile terminal manufacturers have positive network externalities, but in real life, the real factors of impacting consumer’s choice are the design level, the level of beauty and hardware indicators, and these factors can not be replaced of the number of mobile terminal manufacturers. Finally, the competition model only studies the situation of the bilateral user’s single ownership, so the analysis of multi-ownership is the direction of this paper.