Research On The Influence Of Technological Innovation Over The Development Of Mobile Phone Industry And The Market Performance Of Mobile Phone Enterprises

The mobile phone was invented in 1973 and the first mobile phone in the world was sold in 1984.Since then the mobile industry began to slowly develop.As the second generation mobile communication standard(2G)was widely adopted and the related technological innovation constantly emerged the mobile phone industry entered a rapid development period.In 2007 the introduction of Apple's iPhone is an important turning point in mobile phone industry.After that the smartphone industry began to get rapid development.Smartphone not only changed the whole mobile phone industry,but also had a profound impact on the media,transportation,and many other industries.During the revolution brought by smartphone,Apple Inc obtained success while Nokia failed rapidly.Meanwhile,there emerged one phenomenon that the market performance(namely profit rate)of many smartphone manufacturers declined after the smartphone industry experienced several years' rapid development.By using the knowledge of innovation economics&game theory and the methods of case study&descriptive statistics analysis,the paper analyzes the influence of technological innovation over the development of mobile phone industry and the market performance of mobile phone enterprises.As for mobile phone industry,technological innovation plays an important role in its development,boosting the development of feature phone and also making smartphone gradually replace feature phone.As for mobile phone enterprises,some conclusions are made as follows:(1)Under the condition that smartphone manufacturers have the same cost function,the greater the degree of differentiation of smartphone brought by the differentiated technological innovation,the higher the equilibrium price,equilibrium profit and profit rate.The increasing number of manufacturers will result in the decline of the equilibrium price,equilibrium output and equilibrium profit,while the degree of reduction is related to the degree of differentiation of smartphone;(2)That iPhone has a great positive effect on the market performance of Apple Inc is because iPhone 2G is a new product innovation,and Apple Inc continuously improves hardware performance and updates software applications of iPhone,which makes iPhone different from other smartphones.On the contrary,the bad market performance of Nokia is attributed to homogenous price competition caused by the lack of product innovation in feature phone,to the market shrinking of feature phone brought by technological innovation of smartphone,and to the relative insufficiency of Nokia's R&D and patent in smartphone;(3)At the beginning of the smartphone industry,because of frequent product innovation,a big innovation space and the large gap between smartphone manufacturers' technological capability,the degree of differentiation of smartphone increases and manufacturers' profit margin rises accordingly.As smartphone industry gradually matures,the technological gap of manufacturers reduces and product innovation space narrows,the degree of differentiation of smartphone falls and thus manufacturers's profit margins decline.To promote the development of mobile phone industry and improve the market performance of mobile phone enterprises,we should strengthen the innovation of smartphone hardware and predict accurately the trend of market competition in mobile phone industry.