# Competition of multiplatform firms: Implications for the Internet of Things

## TL;DR

This paper explores how companies offering multiple connected devices, like smartphones and smartwatches, compete and influence consumer choices in the Internet of Things.

## Contribution

The paper introduces a novel analytical model for multiplatform firms in the consumer IoT ecosystem.

## Key findings

- New platform devices can disrupt the smartphone market under certain conditions.
- Making new devices resemble smartphones can be profitable for vendors.
- Multiplatform firms differ from single-platform firms in strategic behavior and market impact.

## Abstract

The Internet of Things (IoT) technology trend is transforming business and society. This creates a need to understand strategic behavior in the consumer IoT, where firms tend to offer multiple platform devices, and new generations of devices are introduced frequently. We propose a novel analytical model that formalizes the concept of a multiplatform firm that offers a system of platforms, such as a smartphone, and a new platform device, such as a smartwatch, and orchestrates a multiplatform ecosystem. The analysis shows how a platform design decision, like offering a new standalone device, affects consumer choices and market outcomes. We identify two classes of new devices that matter, and show when a new platform device may disrupt the smartphone market. Moreover, we characterize conditions under which it is profitable for a vendor to make its new platform device look and feel more like its smartphone. Overall, we provide insights into how multiplatform firms differ from platform firms. We identify future research opportunities on the economics of consumer IoT and multiplatform ecosystems.