Platform competition and ‘failure’ in the standardization paradigm

Abstract

This paper explores the question: ldquoWhat is the relationship between standards and business models?rdquo and illustrates the conceptual linkage with reference to developments in the mobile communications industry. The short case studies of Mobile-ICT illustrate that regardless of institutional orientation or process, the most important standardization strategy for equipment and service providers is to create platforms that are open to the development of complementary products and services while at the same time preserving the proprietary edge necessary to ensure lock-in effects. Both cases yield strong reasons to doubt whether many of the traditional advantages of standardization (interoperability, economies of scale, positive externalities etc.) will be achieved equitably for all of the stakeholders.