Rivalry enablers in ecosystems: The role of dominant operating system platform openness across diverse national contexts

Digital technology has increasingly made hardware devices reliant on software, particularly operating system platforms. In an operating system platform ecosystem, the platform sponsor exercises property rights over its platform, while makers of platform-based devices (i.e., hardware products that run the operating system) serve as the channel through which the sponsor disseminates the platform to end users. By bridging industrial organization with the platform literature, our study examines how the sponsor of a dominant operating system platform may influence competition among platform-based device makers, particularly the concentration in the device maker market. We argue that a dominant platform’s openness to device makers—the extent to which it imposes no restrictions on device makers in its development and use—has a competition-fostering effect, reducing market concentration. From an industrial organization perspective, platform openness reduces barriers to entry and growth for smaller device makers, enabling them to erode larger rivals’ market power. Moreover, integrating insights from the platform multinational companies (PMNCs) literature, we contend that this effect varies across countries, shaped by ecosystem-, industry-, regulatory-, and socio-economic contingencies. We find support for our hypotheses using data on operating system platform sponsors and device makers in the mobile phone and tablet industries from 2009 to 2019 across 190 countries. Additional analyses show that some contingency effects are stronger when dominant platform sponsors hold leadership positions across multiple national markets, a construct we term multicountry dominance presence. Our findings contribute to industrial organization, international business, and platform literature. • Investigates how dominant OS platforms shape competition among device makers • Openness of dominant OS platforms reduces concentration in the device maker industry • Ecosystem-, industry-, regulatory-, and socio-economic moderators at the national level • Contributes to international business, industrial organization, and platform literature • Tests hypotheses with data on the global mobile phone and tablet industries