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Modular Confines of Mobile Networks: Are Iphones Iphony?

George Mason Law & Economics Research Paper No. 10-01

3rd Annual Conference on the Law and Economics of Innovation, May 2009

32 Pages Posted: 8 Jan 2010  

Thomas W. Hazlett

Clemson University

Date Written: May 7, 2009

Abstract

Strategic investments by wireless carriers and others are generating rapid development of the “mobile ecology,” increasing modularity even while embracing and extending vertical controls. Coordination among complementary asset owners and simultaneous rivalry among platforms suggests that the process of creative destruction is robust. Moreover, innovation “at the edge” is vibrant, with smartphone suppliers Research in Motion (Blackberry), Apple (iPhone), Google (gPhone), among others, driving carrier strategies. That vertical network policies help generate welfare gains is apparent via revealed consumer preferences, the advanced state of technology under “strong bundling” in Japan, and the fact that even ostensibly “open” platforms retain an important measure of vertical control, efficiencies yielding value in rivalry against competing platforms.

Keywords: AOL, AT&T, application platforms, business models, Carterfone, cellular, choice, FCC, Federal Communications Commission, marketplace, Microsoft, monopoly, Motorola, Nokia, Palm, price system, regulation, Ronald Coase, Timothy Wu, vertical integration

JEL Classification: K23, L14, L26, L51, L63, L96

Suggested Citation

Hazlett, Thomas W., Modular Confines of Mobile Networks: Are Iphones Iphony? (May 7, 2009). George Mason Law & Economics Research Paper No. 10-01; 3rd Annual Conference on the Law and Economics of Innovation, May 2009. Available at SSRN: https://ssrn.com/abstract=1533441

Thomas W. Hazlett (Contact Author)

Clemson University ( email )

Clemson, SC 29634
United States
8646563430 (Phone)
8646564192 (Fax)

HOME PAGE: http://hazlett.people.clemson.edu/

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