Diffusion of Smartphone in Global Telecommunication Markets

Transcription

1 Diffusion of Smartphone in Global Telecommunication Markets Sangwon Lee Assistant Professor Central Michigan University & Seonmi Lee Researcher KT Corporation 1

2 Smartphone A smartphone is a mobile phone offering advanced capabilities, often with PC-like functionality (PC-mobile handset convergence). Generally a smartphone is a phone that runs complete operating system software providing a standardized interface and platform for application developers. (e.g.) iphone OS, Android, Microsoft Windows Mobile 2

3 Growth of Smartphone It is estimated that sales of smartphones will constitute over sixty five percent of mobile handset sales by at the end of 2016 (Telecom Trends International, 2010) 3

4 Smartphone Sales by Operating System in 3Q

5 Purpose of the Study What factors influence the diffusion of Smartphone? 5

6 Purpose of the Study This study examines Adoption factors of smartphone The effects of competition :OS Competition, Market Concentration The effects of standardization policy Network Effect The effects of other demographic factors ICT Use (e.g.) Internet use Macro-level factors of smartphone adoption!!! 6

7 Diffusion Pattern Diffusion pattern of new telecommunication technologies : S Shape Curve Adoption Rate Time 7

8 The Model, Method, and Data Ln Y it (Smartphone Deployment) = β 0 + β 1 (Network Effect) it + β 2 (Market Concentration) it + β 3 (Mobile OS Competition) it + β 4 (Standardization Policy) it + β 5 (Income) it + β 6 (Urban Population) it + β 7 (Internet Use) it + α i S i + ε it 8

9 The Model, Method, and Data Variables Smartphone deployment Measurement Smartphone subscribers per 100 inhabitants Market concentration HHI (Herfindahl-Hirschman Index) in smartphone markets Mobile OS competition Standardization policy HHI (Herfindahl-Hirschman Index) technology in smartphone markets Policy Dummy (1 for multiple standards, 0 for single standard) Network effect Income Urban Population Internet use Previous year s smartphone subscribers per 100 inhabitants GDP per capita (USD PPP) Share of Urban Population Internet users per 100 inhabitants Data Sources: Gartner, ITU, OECD, World Bank Data: Q Q (15 countries data) 9

10 Empirical Results: Regressions Full Model Final Model Variable Coefficients t Coefficients t Constant *** *** Market Concentration * * Mobile OS Competition ** *** Income * Standardization Policy Urban Population *** *** Internet Use *** *** Network Effect *** *** R-Squared Number of observations * Statistically significant at the 10% level ** Statistically significant at the 5% level ***Statistically significant at the 1% level 10

11 Empirical Results: Smartphone Diffusion Network effect, urban population, Internet use, market concentration, and mobile OS competition are significant factors in smartphone diffusion. Previous smartphone penetration was correlated with current smartphone diffusion (network effect). Higher levels of urban population and Internet use are important drivers of smartphone diffusion. 11

12 Empirical Results: Smartphone Diffusion The significance of the urban population variable suggests that better cost conditions are a driver of smartphone diffusion. The significance of the Internet use variable suggests that high levels of Internet users were early adopters of smartphone. 12

13 Empirical Results: Smartphone Diffusion The significance of the market concentration variable suggests that high levels of market competition is a driver of smartphone diffusion. The significance of the mobile OS competition variable suggests that high levels of technological competition is a driver of smartphone diffusion. 13

14 Theoretical Implications: Network Effect Higher usage of smartphone services makes them more valuable. The decision by smartphone consumers regarding which network to join will depend not only on relative prices, but also the expected size of the mobile network. 14

15 Policy Implications Impacts of Mobile OS Competition: Technological competition in smartphone markets is likely to foster innovative applications and stimulate smartphone adoption. In the initial 4G mobile markets, governments need to be open to diverse mobile OS for competition. 15

16 Policy Implications Impacts of Market Competition: Policies for promoting market competition is necessary for promoting smartphone diffusion. 16