Entry, Exit and Innovation over the Industry Life Cycle in Converging Sectors: An Analysis of the Smartphone Industry

Abstract

This paper examines the digital convergence process that led to the development of the smartphone sector and the dynamics of entry, exit and innovation over the industry life cycle. We have verified, by a historical-longitudinal study, if several empirical regularities that characterize the evolution of firms and industries over time have distinguished also an industry born from a sectoral convergence process. From the analysis it emerged that the evolution of market sales and of product innovation in the smartphone industry, as well as firms entry and exit dynamics, are consistent with the evolutionary model identified by technology management and industry life cycle studies. It has also been found that the convergence process has favored the entry and the survival of new entrants, compared to the incumbent firms, coming from the native converging sectors – that of Personal digital assistants and of Mobile (feature) phones – from which the smartphone industry originated.