Open Mobile Platforms: Modeling the Long-Tail of Application Usage

Abstract

In management research, the long tail phenomenon is typically linked to the long-tail of product demand distribution, particularly under electronic distribution, storing and consumption of content. This paper discusses the role of open mobile software platforms in creating the market for niche mobile applications. In particular, the transformation of the mobile industry from mobile communications towards computer and Internet industries is discussed, with a particular focus on the open software platforms of mobile phones that facilitate innovation. This study makes a hypothesis that open software platforms are boosting the use of niche applications. The paper consequently collects empirical data on smartphone usage over three consequent years in Finland. The dataset of 1 145 smartphone users is analyzed in studying whether the long-tail phenomenon is evident in the demand for mobile applications. The analysis of usage-level data reveals that the application demand is more heterogenic in the newest panel study than in the earlier studies. In other words, though the top 5% of applications typically represent more than 90% of total application usage, the bottom 80% of applications (the long-tail part) already represent 2.10% of total observed application usage in 2007, whereas this tail is only 1.39% in 2006 and 0.89% in 2005. In the newest dataset of 2007, 6.9% of top applications represent 93.1% of total smartphone usage. The analysis reveals a U-relationship between the number of users and mean usage frequency of applications. This means that many of the niche applications are being used actively by those who installed them, suggesting that the value of add-on applications is high.