Network Effect: Who is Going to Win the Mobile Operating System War? iOS or Android?
Now a day, Android and iOS are the two operating systems that dominate the global mobile operating system market. As demonstrated by the bellowed stacked column graph, Android and iOS are seizing the market share of other operating systems before they become dominant players.
Android and iOS are Taking Over the Global Market
We can observe that starting in 2012, iOS and Androids are taking over the major player Symbian OS*’s share. One possible hypothesis of the takeover is that Android and iOS are better in terms of price and quality (the quality measure can be in terms of ease of use, faster processing, etc.). Applying the concept of Rule of Threshold, we can explain that because of Android and iOS’s heavy R&D and continuous improvements, the payoffs of adopting Android and iOS increase, lowering the threshold of the customers to switch from Symbian OS* and other operating systems.
(from Statista) What’s next? Will One Dominate the Mobile Operating System Market?
Going back to the graph, we can see that operating systems besides Android and iOS have had almost no market share since 2019. Beginning 2019, the market shares of the two giants fluctuates, yet the net effect is somewhat close to 0; overall, the giants’ share is didn’t change in recent years. From this graph, we can make a hypothesis that the two clusters (adopters of Android & adopters of iOS) can neither diffuse one nor the other because the threshold of adopting a new operating system is too high. For instance, game accounts of the different operating systems can’t be synchronized. If I have League of Legend mobile game on my Android phone and switch to an iPhone, my user data would not carry over; I would lose all the money and time I invested. Keeping an Android operating system phone gives me a higher payoff than switching. Therefore, I would stay in my Android cluster until the payoff of adopting iOS is higher than the payoff of keeping Android.
According to a Business Insider article, author Gobry claimed that due to network effect, iOS will take over Android’s shares. As he explained in the article, end-users will chase the software developers since application software are the heart of a smartphone and its operating system. Because the iOS platforms generate higher revenue, software developers are more incentivized to develop and improve applications on iOS. It increases the payoff of the iOS operating system, which users of the higher threshold will switch to iOS. With the knowledge we obtained regarding The Threshold Rule in class, Gobry’s hypothesis sounds valid. In this case, what will Andiord do to increase its payoff to retain users?
Source:
https://www.businessinsider.com/understanding-the-network-effect-in-the-mobile-platform-war-2012-3