Evolutionary biology for mobile phone strategy

Evolutionary biology for Mobile phone business strategy

Alf Bae

[email protected]

Summary

• Apple iPhone took a strategy of K-Selection at 2007. Risky but nothing too much to loose. Successfully invaded and disturbed the market quickly.

• iPhone shocked in the eco system. It was too big to be dominated by iPhone alone.

• iOS and Android had expanded their eco system over the market at full potential growth rate.

Why Biology is important for us?

• We may learn something from Biology. • Especially, from the

evolutionary biology.

• Evolutionary biology and a little bit of math!

Live long and prosper

• All creatures want to live long and be prosperous.

Ecologic world of mobile phone

• What happen in 2007?• Even after the radical innovation

comes, old is still good for awhile. A chance of change may be given but it looks too dangerous.

“Awesome!”2007 June

That was an invasion by a new species.And it becomes dominant species.

Invasive species : European rabbit infestation in Australia

• Disrupt ecosystem• Cause species loss• Consume all resources• Change landscape

Exponential Growth

• Also known as a J-curve• Growth is a fixed percentage of

the whole (e.g., 10% per day or year)• Population is growing at its full

biotic potential

Logistic Growth• Also known as S-curve• Growth slows as the population

approaches Carrying Capacity• Populations stabilize at carrying

capacity

Android and iOS draws J curve

• Shows the new species how rapidly dominant an eco system.• Android and iOS

made a J curve growth.

Where was Nokia at 2012?

volumes sold >

operating profit>

Nokia

Nokia

Apple

Apple

Apple

Nokia

And in 2013

So if you want to be selected by nature , need to choose a strategy.

It’s all about Natural selection!

“r-Selected” Species

• r = Growth rate• Reproduce young• High reproductive rates• Many small offspring• Short-lived• Found in unstable or unpredictable

environments

Examples of r-Selected Species

• Weeds, bacteria, insects, algae, small mammals

“K-Selected” Species• K = Carrying Capacity

• Reproduce later in life• Low reproductive rates• Fewer large offspring• Long-lived• Stable or predictable environments

Examples of K-Selected Species

• Elephants, great apes, whales, human

What Determines Population Size or Carrying Capacity?

• Environmental Resistance• All the limiting factors that

tend to reduce population growth rates

• Balance between biotic potential & environmental resistance determines growth rate

What are some Limiting Factors?

Environmentalresistance

Carryingcapacity

Stabilizedpopulation

sizeEx

pone

ntia

l gro

wth

Limiting factors:WaterSpaceFoodPredatorsDisease

Dominant Species

• Who is the dominant species in earth? Human!

• Versatile surviving skill(language and culture)• Reproduce later (over 30? Now)• Low reproductive rate (almost 1.x)• Long-lived ( over 60yrs)• Stable of predictable

environments (after world war II)

So What?

• What is carrying capacity of mobile phone business?• What is best point between r-selection and K-selection continuum?• How can we be a dominant species?

“User’s Selection” is “Nature’s Selection”

r and K strategies in mobile business

What happens?

• Old Motorola, Samsung and Nokia’s r-Selection strategy (many product as possible in portfolio) in feature phone was failed to keep their dominant market any more.

• K-Selection strategy by Nokia smart device is also failed to dominate market from 2010-2013. WM6 &WM7 couldn’t compete with Android nor iOS neither.

• From 2010, r-Selection strategy could be back for Android. Android platform dominates and is stabilized.

• From 2010, Nokia chose a kind of K-Selection strategy but it was too expensive for Nokia. Too late. Risk of the strategy is realized.

Questions?

• Do you have enough products in portfolio?• Is it time for increasing or decreasing the size of portfolio?• Are you focused on a strategic area and invest enough resource on it?• During arm race, how can you have a leadership at high ground?• Arm racing is approaching to end? If it is expected, do you have a

next plan?

Company Confidential. ©2010 Nokia 25

r-K continuumr-Selected K-SelectedMany as possible The OneArea Defense One by one

Diversionarytactics

Multiple choice but depends on current situation