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Competition of multiplatform firms: Implications for the Internet of Things

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  • Frank MacCrory
  • Evangelos Katsamakas

Abstract

The Internet of Things (IoT) technology trend is transforming business and society. This creates a need to understand strategic behavior in the consumer IoT, where firms tend to offer multiple platform devices, and new generations of devices are introduced frequently. We propose a novel analytical model that formalizes the concept of a multiplatform firm that offers a system of platforms, such as a smartphone, and a new platform device, such as a smartwatch, and orchestrates a multiplatform ecosystem. The analysis shows how a platform design decision, like offering a new standalone device, affects consumer choices and market outcomes. We identify two classes of new devices that matter, and show when a new platform device may disrupt the smartphone market. Moreover, we characterize conditions under which it is profitable for a vendor to make its new platform device look and feel more like its smartphone. Overall, we provide insights into how multiplatform firms differ from platform firms. We identify future research opportunities on the economics of consumer IoT and multiplatform ecosystems.

Suggested Citation

  • Frank MacCrory & Evangelos Katsamakas, 2024. "Competition of multiplatform firms: Implications for the Internet of Things," PLOS ONE, Public Library of Science, vol. 19(5), pages 1-19, May.
    • Handle: RePEc:plo:pone00:0300522
    DOI: 10.1371/journal.pone.0300522
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    References listed on IDEAS

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    1. Metallo, Concetta & Agrifoglio, Rocco & Schiavone, Francesco & Mueller, Jens, 2018. "Understanding business model in the Internet of Things industry," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 298-306.
    2. Andrew Whitmore & Anurag Agarwal & Li Xu, 2015. "The Internet of Things—A survey of topics and trends," Information Systems Frontiers, Springer, vol. 17(2), pages 261-274, April.
    3. Dijkman, R.M. & Sprenkels, B. & Peeters, T. & Janssen, A., 2015. "Business models for the Internet of Things," International Journal of Information Management, Elsevier, vol. 35(6), pages 672-678.
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