A Proposal for a Standard With Innovation Management System

Takashi Hirao and Yusuke Hoshino
5. Habitat isolation as the result of competition between business ecosystems
An advantage for the NTT DoCoMo ecosystem was advanced technology based on technological
knowledge accumulated under the leadership of NTT DoCoMo. In the domestic market, this promoted
the diffusion of service-specific handsets. However, these mobile phones had too many advanced
functions for the GSM market, which had different mobile communication standards.
On the other hand, an advantage for the GSM ecosystem was its greatest common denominator
technology, which allowed rapid expansion of global model handsets. Handsets that were usable
across GSM’s communication area were effectively diffused in the global market and were successful in
maintaining international roaming functions. However, the performance of such GSM handsets was
inferior in Japan’s market, where mobile phones with various advanced functions were entrenched.
Thus, the difference in the business strategies of the GSM and NTT DoCoMo ecosystems led to
distinctly different technological innovations. As a result, Japan’s habitat isolation was brought through
competition between the business ecosystems.
6. Conclusions and implications
This study has investigated why the Japanese mobile phone industry fell into the Galapagos syndrome,
focusing on competition between business ecosystems in the global mobile phone industry. First, we
presented evidence that the different patterns of platform leadership and network formation led to the
different structures of business ecosystems. While the NTT DoCoMo ecosystem was formed based on
unclear commercial practices under the leadership of NTT DoCoMo, the GSM ecosystem was
constructed based on clear rules under the leadership of mobile phone producers who held essential
IPRs. These differences influenced the structure of the business ecosystems, more specifically, the
openness of the business ecosystems’ structures.
Second, the different structures of the business ecosystems led to differences in the technological
trajectories they followed as the GSM and NTT DoCoMo ecosystems followed different business
strategies. As a result, we have found that competition between business ecosystems with different
structures led the Japanese mobile phone industry to its isolated Galapagos syndrome circumstances.
This case study describes how competition between business ecosystems with different structures may
conclude. It has generated some important findings that help us understand recent changes in business
strategy. Our research stream next needs to help us understand selection as the result of competition
between business ecosystems. This implies that the complementary relationships between the actors in
a business ecosystem influence network economics in diverse ways. Therefore, the next step in our
study aims to scrutinize how different patterns in the structure of business ecosystems have influenced
network economics.
Acknowledgements
This research was partially supported by the Japan Society for the Promotion of Science, Grant-in-Aid
for Scientific Research (A), 23243054, 2011.
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