Apps Development for Smartphones: an Example of User’s Innovation

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Apps development for smartphones: an example of user’s innovation

Microeconomics of Technical Change 8329

Nicole Casadei Carlotta Costanzo

a. y. 2010/2011

TABLE OF CONTENTS

1 - INTRODUCTION ..............................................................................................................................1

2 - INNOVATION BY USERS: COMPETITIVE VALUE THROUGH TOOLKITS……...................2

3 - USERS’ ROLE IN THE APPS ECONOMY………………………………………………………..6 3.1 - USERS, INNOVATION AND DIFFUSION IN THE IPHONE CASE………………....8 3.2 - APPROPRIABILITY MECHANISMS………………………………………………....10

4 - CONCLUSIONS………………………………………………………………………………...…13

5 - REFERENCES………………………………………………………………………………..…...15

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1 - INTRODUCTION This paper explores the role users have in the development of applications for smartphones. Developers have a primary role for companies such as Apple or Blackberry because they are responsible for the creation of new contents or programs that turn out to be real innovations responding to users’ needs. The aim of this research is to show how mobile phone companies and common users interact, using the smartphone as a medium to give birth to innovation. Common users are provided with tools that enable them to develop easily applications likely to represent innovations in the way people interact with the world through digital technologies. It is interesting to understand the reason why companies do so and how they can exploit these new sources of innovation. It is also relevant to analyze the motivations behind users willing to develop applications and to show how to reach a certain balance through regimes of appropriability. That of apps development for smartphone can be considered as a relevant example of user’s innovation that together with the revolution carried by smartphones is reshaping the way people interact, the way they live their city and the way companies provide their services.

The following paper is articulated into three sections. The first one contains a brief literature review aiming to link the concrete case of apps development by users to what has been theorized in the field of user’s innovation. An explanation of how firms enable their users to develop applications will be provided in the second part. This part will also analyze the system of incentives encouraging users to develop and get on developing applications for smartphone. We will focus on the appropriability regimes likely to ensure protection and to guarantee a source of revenues. In the last part, the authors will draw some conclusions basing on the findings of the research underlying pros and cons of the topic analyzed.

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2 – INNOVATION BY USERS: COMPETITIVE VALUE THROUGH TOOLKITS

Users’ needs are increasingly complicated and refined thus making it more difficult for companies to satisfy them. On the other side, consumers have more and more access to sophisticated programming tools that can be run on personal computers. This means they have the capabilities to design their products according to their needs. This emerging trend has shifted the source of innovation from manufacturers to users leading towards what E. Von Hippel has called democratization of innovation. This phenomenon has been observed in many sectors, especially high-tech, and this paper is going to focus on user’s innovation in the development of applications for smartphones. Going more in depth, we observed that many mobile phone companies decided to outsource the task of developing applications for smartphone to users. The strategy adopted by such companies is to provide a toolkit, in some cases for free, that enables common people willing to enrich the functionality of their smartphone to develop their own application. This phenomenon is gaining attention even from companies that want to reshape the services they offer or just add new ones and from start up companies willing to build their business right on this growing and...
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