The Greater Success of the Japanese Mobile InternetThe Interaction Between Path Dependencies, Disruptive Technologies, and Network Effects
January 28, 2002 / 6.30 P.M.
Jeffrey L. Funk, Kobe University
This lecture describes how the interaction between path dependencies, disruptive technologies, and network effects explains the greater success of the Japanese mobile Internet as compared to the rest of the world. This difference cannot be explained by traditional theories of network externalities and path dependencies, as the Europe and North American actually created a more open and broadly used standard than the Japanese firms. Instead, the disruptive nature of the mobile Internet has required firms to focus on a different set of users than those previously considered to be the main users in the mobile phone industry and a different set of applications and technologies than those widely used in the fixed-line Internet.
Disruptive technologies improve some aspects of product performance while sacrificing others, thus making the new technologies appropriate for a new set of customers and applications (e.g., mobile consumer users) than those previously considered to be the main users and applications (e.g., mobile business users). And due to a combination of different initial factor conditions, intelligent decisions, and chance, the Japanese firms, in particular NTT DoCoMo and its partners have appealed to these new users and creators of new applications and technologies while Europe and North America have not. The network effects have magnified these path differences by substantially rewarding the winners and punishing the losers. The presentation will draw parallels with the origins of the PC, fixed-line Internet, and consumer electronic industries and conclude with a discussion of recent trends in mobile Internet applications such as mobile phones as the new contact point with consumers, mobile shopping, and phones as tickets and money.
Jeff Funk has been studying the global mobile phone market for more than five years at Kobe University. He is the author of two recent books on the mobile phone industry: The Mobile Internet: How Japan Dialed Up and the West Disconnected, ISI Publications and Global Competition Between and Within Standards: the case of mobile phones, Palgrave. He is currently writing a second book on the mobile Internet entitled quote;The Mobile Economy: How the Mobile Internet is Changing Business.quote;
The presentation will be given in English. The DIJ Business & Economics Study Group is intended as a forum for young scholars and Ph.D. candidates in the field of Business and Economics Studies. Everybody is welcome to attend, but kindly asked to register by January 25th with Andreas Moerke