Breaking up mobile: implications for firm strategy

Abstract

PurposeThis paper seeks to support and extend other scholars’ examinations of the evolution of technological modularity, vertical specialization and the concepts of the drivers of change in the basis of competition through an analysis of the evolution of the mobile phone industry.Design/methodology/approachA two‐year research project was undertaken and in‐depth interviews took place with managers at companies that were responsible for developing the value chain approaches of their firms. Companies were identified from the existing body of literature, observation and personal contact. Additionally, data were collected from developing case studies.FindingsThe paper finds that the mobile phone industry value chain is in the process of deconstructing towards more horizontally stratified structures for some device segments. But, unlike the PC industry, an industry which many analysts suggest provides a precedent for likely evolution of the mobile phone value chain, this trend will not be uniform or consistent across different product types. This will require mobile phone manufacturers to adapt their organizational structures and value chain approaches accordingly, and to rethink the basis for future competitive advantage.Research limitations/implicationsAs the research is based on interviews with a limited number of firms within the extended mobile handset industry value chain, it cannot be suggested that the impact of trends identified has equal impact for all firms.Practical implicationsMobile handset vendors should learn from the PC industry and make sure that their future strategies are not made simply on the basis of cost optimization or speed to market.Originality/valueThe paper fulfils an identified need to understand how industry structures are evolving in one of the most dynamic sectors in the world.