The Value of Technology Releases in the Mobile App Ecosystem
The Value of Technology Releases in the Mobile App Ecosystem THE ECONOMIC IMPACT OF SOFTWARE DEVELOPER KITS Jin-Hyuk Kim, University of Colorado Boulder Yidan Sun, Illinois Institute of Technology Liad Wagman, Illinois Institute of Technology January 2021 The Value of Technology Releases in the Mobile App Ecosystem 1.EXECUTIVE SUMMARY The smartphone digital ecosystem comprises many layers. Platforms release new hardware, operating systems, and functionalities, accompanied by Software Developer Kits (SDKs), which enable app developers to take advantage of the new hardware and software features. Developers, engineers and designers come up with innovative product ideas, and these ideas can result in new apps offered to consumers. Despite the theoretical understanding of some layers of platform markets in the academic literature, and the well-established practice of utilizing SDKs in the app ecosystem, how much economic value or consumer surplus is being generated by such technology releases has been elusive. Using an expansive dataset of iOS and Android app market activities from an app intelligence service provider, we derive results that identify robust effects of technology (SDK) releases on app development, which in turn affect smartphone sales. In addition, we link technology releases to new job creation, and provide a measure that estimates the consumer surplus associated with apps. An implication of SDK adoption is that more apps leverage new platform technologies. Put simply, SDK adoption reduces the time it takes to develop apps and enables developers to introduce and take advantage of new hardware functionalities. To that effect, we present preliminary evidence that SDK releases may increase early-stage startup funding as well as the size of employment in a relevant high-tech sector (e.g., software developers).
[Show full text]