The German mobile standards battle

The diffusion of innovations has long been a research domain in IS research. Yet, there is no sound theory nor practice to fully understand the complex mechanisms behind networks of users who are tied together by compatibility requirements as is frequently witnessed in information and communication networks. The goal of this paper is to identify key determinants of the technology battle between WAP and i-mode that is recently raging between German cellular service providers and to propose a possible diffusion path. By adapting an existing network model of technology diffusion, key influences are identified and incorporated into a computer-based simulation model. In doing so, trade-offs like better presentation quality on i-mode cellular clients vs. higher service costs compared to WAP applications can be modeled to propose a systematic sensitivity analysis of factors influencing the success of the respective mobile technologies and associated services. Not at least, the simulation model supports mobile services providers to customize their prices for a faster market penetration through regarding not only indirect (WAP, i-mode) but also direct network effects (SMS, i-mail) as crucial factors for adopters.