Chapter 3: Methodology
3.1 The Research Process
This research is exploratory, with the objective of arriving at an understanding of whether first-mover advantages exist in app innovation and how first movers can sustain such advantages. To answer these questions, this study is conducted in six stages, as summarized in Figure 3-1 and Table 3-1, which shows the purpose, process, and deliverables of each stage. The first stage consists of reviewing past research to identify the advantages that first mover enjoy and how they can sustain these advantage. Based on the results of the first stage, the second stage is designed to further collect research data, a collection of information that comes from case analysis, expert opinions and questionnaire. The third stage involves analyzing research data in more depth. By wrapping up the findings from previous stages, the fourth stage is aimed at concluding the research and targeting to organize research findings in a comprehensive manner that can further benefit app developers or coworkers in the app market.
Table 3-1. Descriptions of the Research Process
Activities Why How Result
To build insights about app development and competition in the app market
Assess reports, market analysis, and official releases about the app market
To track the market positions of different kinds of apps
Collect daily top-300 lists from Feb 8, 2008 to Sept 30, 2013
Period distribution of apps in the top lists Data analysis To find out what
first-mover advantages app developers enjoy, and how the advantages can be sustained.
Analysis of app market position on App Annie for each category from the literature review
Examine the effect of price or version changes
Verify first-mover
Conclusion To organize findings and draw a conclusion
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16 Figure 3-1, Research Process
3.2 Data Collection
To verify advantages and strategies, we organized in the literature review a case analysis, a questionnaire, and expert interviews. The method for verifying every advantage and strategy depended on their characteristics (See Table 3-2).
Table 3-2. Descriptions of the Research Process
Advantages and Strategies Method
Advantages
Technology leadership Expert Opinion Resource preemption Case analysis
Switching costs Questionnaire
Pricing advantages Case analysis Network externalities Case analysis
Strategies
Raising the barrier to entry Case analysis Increasing switching costs Case analysis Enhancing services Case analysis
Case analysis
The data for case analysis were collected from organizations and Websites that provide reports or statistics about app stores. There are several organizations and
Literature Review
Case Analysis
Expert Opinion
Questionn aire
Data
Analysis Findings
Data Collection
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Websites that provide such data. However, we chose App Annie (App Annie, 2013), a Website that provides daily and hourly ranking data for apps collected from The App Store and Google Play, to obtain the data we needed. App Annie also helps enrolled developers to track their apps’ downloads and revenues, and it provides mobile analytics for iOS and Android. Furthermore, App Annie revealed that more than 200,000 apps, and 80% of the top app publishers, use App Annie data. Because Apple’s App Store has the most downloads among app stores, we chose it as our data source.
First, every 24 hours we collected the top 300 free and paid app lists for all categories.
However, the earliest that top-ranking lists could be obtained from App Annie started on February 8, 2008. We collected the daily ranking data from February 8, 2010 to September 30, 2013. Second, we calculated how many days every app had been listed in the top-300 list. By doing this, we could determine how long every app had been listed on the top-300 list, and we made a table that presents the period distribution of apps that have been listed on the top lists. We found that there were 18,041 apps that had never been listed in the top list, including 7,232 paid apps, 6,725 free apps, and 4,084 apps that had been removed from the App Store. Third, for our research subjects we picked out apps (Appendix 1) that had been listed on the top charts for more than two years.
Expert opinions
A group of app developers were selected for this study because of their experience and expertise in the development and management of app software on Smartphones (See Table 3-3). In order to get the experts’ opinions, we designed several questions (Appendix 2) for the respondents to answer. The purpose of this stage was to provide understanding of how apps gained advantages through technological leadership.
Table 3-3. Lists of Selected Experts Experts Years of
Experience
Category of
Apps Description Downloads
James Eight months
Productivity Product Manager 1,500
Daniel Two years Social Networking
Developer Not
published
Wei Four years Utilities Developer Not available
Pei-Kang Two years Productivity Developer, Product Manager
900,000
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18 Questionnaire
The questionnaire was used to verify the strategies and advantages that we listed above, and it helped us to understand consumers’ switching behavior with regard to apps and to identify the factors that affect consumers’ switching behavior. In order to collect consumers’ switching behavior on apps, the questionnaire was divided in to three sections, with each section focusing on one type of switching cost based on the characteristics of the app’s development and on the literature review. To do this, a survey was conducted, and the questionnaire was distributed to 222 participants from whom we collected data. Of the respondents, 53% were male and 47% were female, and 56% were using Android devices, while 44% were using iOS devices.
3.3 Data Analysis
After collecting the necessary data, we organized the criteria listed in Table 3-4 to come to an understanding of the first-mover advantages of app developers and their strategies for sustaining these advantages. In order to gain expert insights, we conducted several interviews with different experts in the field to obtain their thoughts on the advantages stemming from technology leadership. The questionnaire was sent to a selected sample of recipients to ascertain whether apps with advantages under certain circumstances were in accordance with recipients' replies. When it came to case analysis, we first categorized the apps into four groups based on the amount of time they had been listed on the top charts. The categories were: (1) apps that had been listed on the top charts less than a month, which we defined as apps without advantages; (2) apps that had been listed on the top chart for more than a month but less than a year, which we defined as apps with short-term advantages; (3) apps that had been listed on the top charts for more than a year but less than 2 years, which we defined as apps with medium-term advantages; and (4) apps that had been listed on the top charts for more than 2 years, which we defined as apps with long-term advantages. Second, we selected categories in which there were more than 10 apps with long-term advantages, and these included entertainment, games, music, photo and video, social networks, and utilities.
Finally, based on the literature review, we prepared a series of questions (see Appendix 3) to examine each app that was picked up in the previous step.
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Table 3-4. Criteria for Data AnalysisAdvantages and Strategies Factors Criteria
Advantages
Technology leadership Patent protection Expert opinions
Resource preemption Space in top charts How long had apps been listed in the top charts
Switching costs
Data The proportion of participants
who agreed that they would not switch to another app because of the factors Learning cost
Uncertainty
Pricing advantages Loyalty
The proportion of apps still listed on the top charts after raising their price.
Network externality Externalities The scale of app stores
Strategies
Raising the barrier to
entry Continuous updates The proportion of apps that continuously update
Increasing switching costs
Facebook fan page The proportion of apps that have a Facebook fan page Twitter The proportion of apps that are
accessible on Twitter Official Web site The proportion of apps that
have an official Web site
Blog The proportion of apps that
have blogs
Peripheral The proportion of apps that have peripheral products
Enhancing services
Social Login The proportion of apps that allow social login
Sharing through a social network
The proportion of apps that allow users to share content through a social network