The popularity of smartphones and the related growth of mobile application created a need for mobile platform owners to open their software platforms up to third party developers in order to meet user demand for mobile applications. This external innovation provides a tremendous opportunity for mobile platform owners to develop a volume and diversity of products they could not develop in-house, but it also presents challenges in attracting a sufficient number of developers and users in order to harness the two-sided and same-sided network effects required to successfully cultivate a robust mobile ecosystem. By developing a research framework based on theoretical and industry literature to the mobile industry, we interviewed mobile app developers for the iOS, Android, and Windows Phone platforms as well as an independent expert specializing in research of the telecommunications industry which provided a list of factors relating to what motivates third party developers to select a particular ecosystem. Factors are presented in terms of economic considerations, the boundary resources within the mobile platforms, the related development community, and the reach the ecosystem provides. These factors are detailed and compared concluding that monetary reward, user engagement and market share the most dominant factors influencing developer choice.

1. Fostering innovation: Factors that attract and
retain third party developers in mobile
ecosystems
SINAN DENIZ, MSC, DEPARTMENT OF INFORMATICS
FERDIA KEHOE, MSC, DEPARTMENT OF INFORMATICS

2. Outline of the research
• Master thesis presented in June 2013
• Study period February – June 2013
• With the objective to investigate factors which attract and
retain third party developers in mobile ecosystems
• Qualitative research interviewing with
– Three third party developers for iOS, Android, and
Windows Phone platfroms
+
– An independent research expert of the
telecommunications industry

3. The phenomenon under study
• Increased importance of mobile app developers caused
by the introduction of a smartphone
App
market
App
developers
App users
Creators of the
platforms’
content
Users of the
platforms’
content
A classical two-sided market
(Eisenmann et al., 2006; Hidding et al., 2011)

4. Motivation of the studied phenomenon
• Collaboration and interoperability between parties in
the new era of software ecosystem (Campbell &
Ahmed, 2011).
• Sharing the risk and cost of development with third
party developers provides an opportunity to leverage an
enormous pool of innovation (Boudreau & Lakhani, 2009).
• This adds a layer of complexity due to the
dependencies between platform provider and third party
developers (Bosch & Bosch-Sijtsema, 2010).
• Cultivating a platform is substantial task and many
technically good platforms have failed due to the lack
of developers (Rochet & Tirole, 2003).

5. Research question and purpose
» What factors attract and retain third party developers in
mobile ecosystems?
• The purpose is to demonstrate necesssary elements to
cultivate a healthy ecosystem (Iansiti & Levien, 2004)
from a developer perspective in which durable
opportunities will be presented to developers to function
successfully.

6. Mobile ecosystem
• Mobile ecosystem refers to an informal network of independent participants who are
connected to and benefit from an underpinning software platform and have a positive
impact on the economic success of that platform (Kittlaus & Clough, 2009).
Mobile
application
developers
Network
Operators
Handset
manufacturers
Users
Mobile platform provider
Two-sided
network
effects
Same-sided
network
effects
Two-sided
network
effects
Same-sided
network
effects
Visualization of mobile ecosystems [Adapted from Tuunainen and Tuunanen, 2001 & Constantinou, 2012 ]

7. Theoretical framework
• Centered around four main themes
•Mobile ecosystems & two-
sided network effects
(Cusumano, 2010; Rochet &
Tirole, 2003; Eisenmann et
al., 2006; Basole & Karla,
2011; Iansiti & Levien, 2004)
•Intrinsic motivations
(Boudreau & Lakhani, 2009;
Hsieh & Hsieh, 2013)
•Same-sided network
effects and coopetition
(Eisenmann et al., 2006;
Walley, 2007)
•Switching costs and
stored value (Klemperer,
2008; Hsieh & Hsieh, 2013)
•Boundary Resources (De
Souza et al., 2004;
Ghazawneh & Henfridsson,
2013)
•Platform governance
(Boudreau & Lakhani, 2009;
Gawer & Cusumano, 2002;
Müller et al., 2011)
•Extrinsic motivations of
developers in competitive
markets (Boudreau &
Lakhani, 2009; Hsieh &
Hsieh, 2013)
•Business models
(Vannieuwenborg et al.,
2012)
Economic
Boundary
Resources
Reach
Community
and
developer
network

8. Research methodology
• Qualitative research interviewing approach was selected as
research in this area is limited and no base of tested provisional
factors exists on which to draw
• Descriptive format of a research approach was adopted since it
provides inference to the best available explanation for developer
choice
• Kvale & Brinkmann’s (2009) seven stages of qualitative research
interviewing were followed
• Four independent interviews are conducted
– iOS/ Android Mobile Consultant
– iOS/ Android Mobile Architect
– Windows Phone Mobile Freelance Consultant
– Telecommunications industry research expert

9. Research framework
• The complete research framework was constructed in line with our theoretical
framework by reviewing online tech industry press articles and respected
sources such as IBM, VisionMobile, and Gartner
• Factors coming out from that review were assessed based on their number of
mentions in online tech industry trade press
– The Technorati Authority was used in assessing the top rated sources as
it measures the linking behaviors of the given website.
Theme Theory Provisional factors
Economic Extrinsic motivations of
developers in competitive
markets
Business models
Number of paid applications
Number of available revenue
models
Boundary
resources
Boundary resources
Platform governance
Software fragmentation
Device fragmentation
Community and
developer
network
Intrinsic motivations
Same-sided network effects and
coopetition
Switching costs and stored value
Size of development community
Reach Mobile ecosystems & two-sided
network effects
User engagement
Market share

10. Findings and analysis I - Economic
Potential for
differentiation
Strong market
share
-
-
Causal connection
Strong causal connection
+ Positive influence
Negative influence
Economic
attraction
User
engagement
Revenue
models
+
++
Willingness to
pay
+
+ +

11. Findings and analysis II – Boundary
resources
Software
fragmentation
Stable
development
environment
Hardware
fragmentation
Rich API
Boundary
resources
attraction
Native SDK
Efficient app
publishing
Developer-
focused
platform
governance
Poor
documentation
-
-
-
++
+
+
+
+
+
Causal connection
Strong causal connection
+ Positive influence
Negative influence
-

12. Findings and analysis III – Community
and developer network
Perception of
the mobile
platform
owner
Affiliation to
development
environment
Investment in
training
Reputation
-
+/-
+
Causal connection
Strong causal connection
+ Positive influence
Negative influence
Development
community
attraction
Engaged
development
community
Size of the
development
community
+
+++

13. Findings and analysis IV - Reach
Multiple
devices
Strong market
share
Developed
market
penetration
-
+
+
Causal connection
Strong causal connection
+ Positive influence
Negative influence
Reach
attraction
User
engagement
++
User feedback
mechanism
+
+

14. Compiled factors
Theme Factors
Key factors Supporting factors
Economic  Strong market share
 User engagement
 Willingness to pay
 Revenue models
 Potential for differentiation
Boundary resources  Stable development
environment
 Developer-focussed platform
governance
 Native SDK
 Rich API
 Lack of software fragmentation
 Lack of hardware fragmentation
 Good documentation
 Efficient app publishing
Community and developer network  Affiliation to development
environment
 Engaged development
community
 Reputation
 Investment in training
 Positive perception of platform
owner
 Size of the development
community
Reach  Strong market share
 User engagement
 Developed market penetration
 Multiple devices
 User feedback mechanism

15. Thank you
ANY QUESTIONS? PLEASE CONTACT US
© Sinan DENIZ
gif12sde@student.lu.se
© Ferdia KEHOE
gif12fke@student.lu.se