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'winners-Take-Some' Markets For Electronic Products Are Increasingly Common

By University of Pittsburgh News

May 15, 2013

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Digital converters are reducing the risk of choosing formats that become obsolete, according to an article published in this month’s issue of Communications of the ACM. The paper's authors include the University of Pittsburgh’s Chris F. Kemerer, Carnegie Mellon University's Michael D. Smith, and the University of Texas, San Antonio's Charles Z. Liu.

The findings are based on research showing that digital product rivalries no longer end with clear winners, and that a shift away from the standards wars of the past is taking place.

Although markets have traditionally moved toward a single dominant standard, today's digital markets are moving toward a "winners take some" model instead of "winner takes all," as digital converters accept multiple formats and enable technologies to coexist. For example, Amazon’s Kindle books are compatible with iPads and iPhones, and flash memory cards are interchangeable among digital cameras, mobile phones, and audio players, underscoring the impact of digital converters on the marketplace.

This compatibility enables consumers to seek product features, functionality, and design without concern over compatibility, and companies can benefit from cross-licensing products to expand their markets.

"Managers should prepare to seize related opportunities rather than fight the last war," the report says.


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