A Comparison of Inter-Organizational Business Models of Mobile App Stores: There is more than Open vs. Closed

Abstract

The purpose of this paper is to analyze the competition among mobile app stores for smart mobile media devices. Therefore, the business models of seven mobile app stores are analyzed with a special focus on Apple and Google. We use e3-value modelling - a formal business modelling technique - for analyzing the critical elements of these mobile ecosystems. The analysis of the app store ecosystems allows a differentiated view on the different strategies of the app store owners. Additionally, we look at the impact of network effects, economies of scale, platform differentiation, quality assurance, and transaction costs on the design of mobile application markets. This theoretical model allows a deeper discussion about the design choices and success factors in the different app store cases. Based on our analysis, we expect that the open versus closed models discussion becomes less relevant - so-called open platforms have closed aspects as well as the other way around - and that competitive differentiation and segmentation strategies will become increasingly critical in order to strengthen the competitive positioning of the different app store platforms.