Research On Operation Strategies For Mobile Terminals’ Bundling Mode

Along with the rapid development of Mobile Internet, consumers’ demand and dependency on mobile terminals has progressively increased. Mobile phones, especially smart phones have become the most important Internet terminals after desktop computers. At present, mobile terminal manufacturers are faced with two basic types of sales modes, which are free mode and bundling mode. In the free mode, mobile terminals can accept a number of telecom operators; users buy phones and service from mobile manufacturers and telecom operators separately. In the bundling mode, telecom operators and mobile manufacturers sign contracts through negotiation. Contract provides that mobile terminal manufacturer is bound with a unique telecom operator, and meanwhile telecom operator need to give some subsidies to the mobile terminal manufacturer. How to manage the pricing and production under the bundling mode so as to achieve the same or higher revenue than that under free mode becomes a common concern of mobile manufacturers and telecom operators.Based on the literature review, for a two level supply chain with one manufacturer and one operator, under additive form stochastic demand, concerning terminal manufacturer dominated bundling mode and telecom operator dominated bundling mode separately, considering the traditional newsvendor problem, the pricing and production policies of the manufacturer are analyzed by building the expected revenue models for both the manufacturer and the operator. In the process of building models, in order to meet the requirements that telecom operator or terminal manufacturer is ready to be involved in the bundling, we add the principal-agent game participation constraints. By solving models, we obtain the bundling modes’ establish conditions between terminal manufacturer and telecom operator. After that, we make comparative analyses for the optimal decisions under the circumstances of free mode and bundling mode on the bases that establish conditions are satisfied.Then, comparative analyses of optimal decisions for two bundling modes which include the optimal prices and productions of the manufacturer, the optimal transfer payments of the telecom operator and the total expected revenues of the supply chain are shown.Finally, we analyze the parameters’ impacts on the optimal decisions for two bundling modes; parameters include the market size, price elasticity of demand and the production cost.