Analysing diffusion pattern of mobile application services in Korea using the competitive Bass model and Herfindahl index

ABSTRACT

Mobile service has been totally revolutionizing the service industry with the explosive growth in mobile application (‘app’) services. With the rapid proliferation of mobile app service, there is still a constant need for the research focusing on the precise and scientific prediction of the diffusion of mobile app service with consideration of competitive relationships. However, most of the relevant research dealing with diffusion did not consider the competition effect among mobile app services. In addition, in mobile app services, big competitors, which have a larger marketing share in same category, can interrupt the diffusion of other mobile app services significantly. Thus, the level of competitiveness also should be considered for more precise prediction of mobile app service. Accordingly, the present study proposes a new approach to analyse the degree of competitiveness of mobile app service categories using Herfindahl–Hirschman index and classify mobile app service categories. Then, this study systematically analyses their respective diffusion patterns based on the given empirical data using competitive Bass model. A case of Korean mobile service industry is presented to illustrate the proposed approach.

KEYWORDS:

• Mobile app service
• mobile service diffusion
• Herfindahl index
• competitive bass model
• diffusion model

JEL CLASSIFICATION:

• C13
• C32
• C53
• C82

Acknowledgments

This work was supported by a National Research Foundation of Korea (NRF) grant funded by the Korean government, MEST (No.2011-0030814)

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the National Research Foundation of Korea [2011-0030814].