App release strategy in the presence of competitive platforms’ quality upgrades

Abstract

Mobile platforms such as Google Android and Apple iOS have established their app stores to entice numerous app developers into their platform ecosystem. These platform firms will deliberate on upgrading the quality of their platforms to bolster performance and security, while app developers may choose to rely on different platforms to release their developed apps as a strategic response. In this study, we explore how the quality upgrade decisions of two competitive platforms affect the app release strategies of an app developer, and reveal the optimal quality upgrade and app release strategies for supply chain members. The platform firms compete on both the platform price and platform quality, and the app developer needs to make decisions about the price and quality of the app. Our analysis suggests that, interestingly, there always exist suitable differences in upgrade efficiency, enabling one platform firm to upgrade the quality in equilibrium irrespective of the app developer's release strategy. In addition, we find that when the app developer releases the app on only one platform, the quality upgrade from the collaborative platform can yield a win-win outcome for supply chain members. Furthermore, our analysis shows that releasing the app on two platforms is not necessarily always the most beneficial compared to releasing on just one for the app developer. The findings carry implications for app developers seeking contented platform collaborators, as well as platform firms such as Google and Apple, which can cope with app release strategies.