The impact of mobile apps on digital economic - Research Paper Example

The impact of mobile apps on digital economic Table of Contents Introduction 2 Literature review 2 Research question and objective 2 Article review 3 Emergence of a digital culture 7 Impact upon the digital economy 9 The smartphone revolution 11 Conclusion 14 Reference List 15 Introduction Technological growth transforms the economy in many ways ranging from the way business is operated and the manner in which organizations and consumers communicate with each other. Modern technology has facilitated the growth of the digital economy whereby sellers, producers and buyers can easily interact with the support of the internet. It has helped in creating a digital network that adequately helps in meeting the needs of business as well as of clients and consumers. The development of digital economy has also adequately reduced the cost of communicating and transfer of information. The world in the recent years has experienced a transformation in respect of the mobile industry and communications. Mobile technology has evolved into becoming a prominent aspect of the telecommunications industry. This revolution was facilitated because of the increasing use of mobile broadband, smartphones and tablets. The mobile industry has revolutionized the way business interacts with its consumers. With the help of different mobile applications, consumers can interact with different companies and conduct economic transactions. The simple supply chain of the mobile industry of the early days has now been converted into an emerging ecosystem that drives economic growth and productivity. Mobile phones have stood to be an integral part of the business since many years. However in the initial days mobile technology stood separate from digital technology. Nowadays everything that is digital has been going mobile involving software, internet, cloud and social media. Mobile applications have become a source of revenue and an opportunity for marketing engagement. Mobile applications have emerged onto becoming an important platform for sales for many retail organizations. This is evident from the increasing number of users of different applications. Faced paced lives of people have increased their adherence towards online and mobile shopping platforms whereby they can easily place orders, get information about different new products and communicate with the suppliers. Literature review Research question and objective The study aims analyzing three important dimensions relating to the subject matter of the research which are: How have the mobile technology surged a digital culture? How has it helped in the growth of the digital economy as whole? How have smartphones helped in enhancing the popularity of mobile application and thereby contributed towards the growth of the digital economy? The research aims at understanding the benefits reaped by the digital economic structure because of the growth of mobile technology and the high usage of mobile applications. It has been observed that the technological growth of the mobile industry has helped in creating value not only the mobile brands but other commercial organizations engaged in selling different products and services to the consumers at large. The study focuses upon analyzing different theories behind the growth of the mobile technology and the impact of the same upon the growth of economy. The research shall also significantly lay light upon the potential causes behind the popularity of mobile technologies and application. Article review According to Margherita Pagani (2004) one of the prime reasons behind the growth of the mobile technology is the increasing number of smartphone users. Smartphones perform a range of diverse functions apart from just making calls and sending messages. Smartphones have exposed the consumers to a world of multimedia by which individuals and business organizations can easily and conveniently exchange information. With the increased exposure of information relating to different types of products and services, different platforms for online sales emerged in the recent times. Consumers increasingly began adhering themselves with the smartphone revolution. Many business organizations perceived this as a potential aspect for expanding their business. Companies began to launch online sites that are compatible with smartphones. As a result through the smartphones, interactive platform between consumers and business units could be established whereby transfer of goods and services were facilitated. The growth of mobile technology has played a crucial role in increasing the sales of advanced multimedia phones. Mobile phone brands have been successful in attracting a large population across the world by launching better and innovative versions which perform a range of functions. Consumers are enabled with accessing different types of tools for exchanging information and effective communication. Research has shown that the increasing amount of time spend on mobile applications have posed as a challenge for the television industry which is seen to increasingly lose viewership because of the emergence of the mobile phones. It has also been observed that the amount of time spend by consumers at retail stores have significantly declined due to the emergence of the mobile and online applications which enable consumers to shop for their desired products sitting in the comfort of their home, from the workplace or while travelling. Mobile applications have additionally helped consumers to choose from a diverse range of products. Consumers can conveniently browse through a larger number of products. Consumers are increasingly choosing to shop online than by visiting retain stores in person (NEMODE, 2013). The figure below shows the diverse functions performed by a mobile enabled having connectivity with the digital technology. Figure 1: Multi-utilities of mobile phones (Source: ACMA, 2011) The development of mobile technology has further facilitated the development of different online application which acts as a platform for establishing reach out between consumers and different brands. Such shopping sites enable consumers to choose from a diverse range of products which can be further filtered on the basis of price, colour and type. Mobile internet facilities have also posed as a challenge for desktop internet. Since mobile phones can easily be carried by consumers, they find it more convenient for utilizing the same for accessing the internet as compared to a desktop. Mobile network providers have also benefitted immensely from the development of mobile technology. In order to download and install different applications, it is important to be able to access the digital network primarily. By offering a range of data plans, network providers have been able to significantly able to increase their revenues. The growth of mobile technology has also helped in increasing a significant number of employment opportunities. Mobile phone companies themselves have been able to expand by developing better products to increase their revenue base. The expansion has helped them to develop a greater number of job opportunities for technicians, software developers and numerous other types of jobs. Additionally many firms have been able grow because of the increase in the sales of advanced phones such as online shopping sites, retail stores having online sales options and data network providers (OMCD, 2014). Like all types of industries, the mobile telecommunications industry also plays a significant role in generating adequate national revenue. The industry is generally seen to contribute towards the revenue of the government through increasing its sales, generating larger amounts of indirect taxes. Apart from this, growth of industries also signifies the increase of corporate taxes. The emergence of mobile technology has also helped in the growth of different media industries who have helped in making different products and services all the more attractive for consumers and helped provide companies with better brand image and popularity. Mobile commerce has also helped banks to expand their business by launching sites that facilitate consumers to transfer money and make payments more conveniently. The influence of mobile technology has helped firms from different industries; both private and public have been able to sufficiently increase their business contributing towards economic growth. The emergence of advanced mobile phones has facilitated the growth of online promotional options. Most companies are seen to develop specialized applications and websites which are compatible with mobile phones for expanding their business (Barnes, 2002). Mobile applications are also subject to a number of regulations. These regulations are shown in a summarized manner in the figure below. Figure 2: Regulatory aspects of the mobile application market (Source: ACMA, 2011) The difference between content and software although holds less significance in the mobile application industry, it has however been made in order to regulate the delivery platforms. In the recent era many legislative rules have been established in order to prevent manipulations and breach of contracts. However the development of socializing platforms and advanced applications has been blurring the regulatory mechanism. There is a high concern amongst the developers of many applications regarding the exposure to personal details. The technology world is highly exposed to the threat of hacking by which personal details such as bank account numbers and personal identification numbers can get accessed. Hackers use such information to steal valuable data. Therefore application software’s are protected from being hacked through various support systems (Rouvinen, 2006). Figure 3: Ecosystem of mobile application (Source: ACMA, 2011) Mobile application designers are seen to sell their products widely without considering the network on which they are meant to be used. The current models of regulation relating to the use of different applications, focuses upon the development of network carriers. The network carriers are essentially not the receivers of revenue from the sale of applications. A large amount of data consumption is also associated with the accessing mobile applications. Consumers and the carriage providers have a separate contract between themselves regarding such a contract. Apart from data consumption cost, many applications bear download and up-gradation charges. It has been found that there is a significantly low amount of transparency regarding the amount of data consumed by different applications. Emergence of a digital culture Technology, be it of any kind is seen to have a significant impact upon the society. Largely technology affects the lifestyle of people and the manner in which individuals in a community interact. The change has both positive and negative aspects associated with it. The development of mobile phone applications have changes the way in which people shop, communicate and search for information. Any and all types of functions are fulfilled by the different types of applications that can be easily accessed through mobile handsets. Such thinking is often referred to as the ‘technological determinism’. Technological determinism is therefore an aspect which sets out a change or sets a trend in respect of lifestyle and the manner in which society and its integral parts interact. Not all types of technological innovations have been successful at influencing a change in the society. Such technologies have been rejected and have slowly been discarded from being used. Only those technological advancements which are beneficial and facilitate numerous advantages have been accepted by the society. In this respect the mobile phone technology has provided growth in various dimensions. For instance the growths of mobile phone applications have facilitated different retail brands to reach out to a larger number of consumers and thereby increase their market base. Similarly mobile applications have also facilitated the development of a large number of software companies who design special applications for distinctive types of businesses. Social networking is one such area of business that has immensely grown because of the increasing usage of mobile phone applications (Wareham, Levy and Shi, 2004). The onset of mobile phone technology has revolutionized the manner in which different organizations conduct business. It has facilitated easy and fast communication between organizations and consumers. Through mobile phone applications, consumers can browse through a range of products from the palm of their hands. It has compressed time and space between consumers, businesses, products and services making them accessible from any place at anytime. Most mobile phone application developers first perceive a specific need of the consumers and develop strategies for meeting the same most effectively. They develop applications which are useful for both consumers and the business units. For instance a mobile phone application was launched sometime ago by a renowned company whereby it is possible for individuals to book movie tickets without actually having to visit the theatre ticket counter. The application easily allows consumers to select a number of tickets and make payments (Goggin and Spurgeon, 2007). The world has undergone a sea of change in the last decade. Almost every corner of the world can now be accessed digitally and most of the world’s population can access the internet. This has revolutionized lifestyles across the globe. Individuals not only gain from exchange of information and communication, but it has also changed the very basics of our daily lives. Nowadays people do not need to stand in long queues for paying bills for different utility services (Shin, 2006). This can be done easily with the help of internet and mobile applications. This feature is applicable for most types of businesses which involve the exchange goods and services for money. Money is easily and directly transferred from different payment gateways to the bank of the suppliers directly. The digital revolution has made life simpler and has facilitated saving of time. This is not only evident in terms of sale and purchase of goods but also in the manner individuals communicate and exchange information. The web has helped in establishing connectivity between people from different nations and cultures. Social interactions platforms facilitate this aspect. Different mobile applications pave way towards facilitating individuals share their experiences with others. Nowadays youngsters are seen to frequently share updates regarding their social life with friends and others through such interactive platforms. If individuals want to know how their friends and family members are doing, they simply log on to a social networking application through their mobile phones and find out the required details. Such social interaction platforms not help in sharing information verbally, but they also support uploading photographs and videos, making the interaction system all the more lively (Kuo and Yu, 2006). The digital culture has changed the world in mainly four ways. Firstly it has had significant impact upon the way individuals communicate and share information. Secondly it has opened new ways by which consumers purchase different goods and services. Thirdly it has helped organizations to popularize their products and services digitally through different applications and internet promotional models. Fourthly, the digital culture has brought about a significant development in the way in which the media communicates with the people. One of the sectors that have gained immense growth because of the development of the digital is the media. The media plays an integral role in spreading news related to current happening. It also makes people aware about different maters and helps developing important insights. The media firms have been enabled to reach out to a large number of people in a more convenient manner with the development of the digital culture (Au and Kauffman, 2008). Impact upon the digital economy The impact of the development of mobile applications upon the digital economy can be studied sector wise pertaining to different industries. One of the prime industries which has benefitted from the development of the mobile technology is the retail industry. The retail industry includes the sales of different types of commodities and services. With the wide spread usage of the internet, consumers could access information relating to the different types of products sold by companies. Soon companies began facilitating shoppers by providing them with online shopping facilities. As more and more people began adhering to such a system of buying products, companies began launching many attractive offers to increase online sales such as promo coupons and discount sales. The popularity of mobile applications encouraged the retail industry giants to consider developing a platform which would facilitate the easy transfer of goods and services. Companies therefore began launching mobile application for selling their goods (Rondeau, 2005). The ways in which such applications function are much similar to the online websites of the companies which also facilitate sales, the only difference being one can be accessed through a desktop computer or a laptop while the other facilitates transactions on a mobile phone or a tablet. Providing sales opportunities to the consumers through mobile phones provides easier and a more flexible means of transacting business. Consumers find that placing orders for different types of goods through mobile applications is much more convenient. The platforms based on which such sales are conducted are mainly of two varieties. One type is where the application is owned by a retail brand featuring only their products; and the other type which are essentially shopping sites that sell products of a variety of brands. It is the later that is of greater popularity as product diversity is significantly high. Such mobile applications help consumers to select their desired product from a range of different types of products and to narrow down their search to limited number of items based on type, cost and colour. The only disadvantage faced by consumers in this type of shopping facility is that the delivery of goods is not instant. It generally takes a day or two’s time for the products to reach consumers. The growth of such mobile retail shopping has also facilitated different types of supply chain and delivery businesses who act as support industries for such online transactions (Sarker and Wells, 2003). Quantitative and qualitative researches conducted by various researchers prove that digital technology has transformed the way in which business activities are conducted. As technology advances, greater changes will simultaneously take place in the business world. Digital economy has driven many organizations to undergo a digital transformation. It is not only the big business houses which are taking the support of the digital economy to expand and grow. Even small business houses are adhering to the digital technology to enhance their connectivity and span of operations. One of the most positive aspects about the digital economy is the expansion of business scope from west to east (Wei and Kolko, 2005). Digital technology has facilitated many business units to expand into the developing nations of east through outsourcing. In this manner business units could develop a larger customer and employee base spread across the nations of the world. Another feature of the digital economy is that it places customers at centre of the economy. The success of such an economy depends upon the manner in which the customers respond to the ideas and the thoughts put forward to them using the digital platform. The digital economy has induced a fast pace growth of the economy in generally. As technological factors change or advance, different business units upgrade themselves accordingly. This calls for innovative business environment. The digital economy has also facilitated the manner in which the organizations project their businesses to the consumers. Many individuals consider that using a digital platform such as company websites help in developing a better perceptual understanding between the organization and the consumers (Boulos, et al., 2011). The emergence of digital infrastructures which includes wireless networks, positioning technologies and advanced mobile handsets is expected to induce a radical shift in digital technology developing an environment which is set to create a world of ubiquitous computing. Slowly the world is progressing into a scenario where almost most human activities would rely upon digital technology. It marks as a key driver for innovation in the future generation. One of the significant areas which is set to get remarkably influenced by the growth and development of the digital technology is the transportation and the healthcare sector. As already, technological innovations will continue to influence the creative industries and the financial sector. Digital economy has opened out new avenues for the development of new types of industries. The smartphone revolution Smartphones have compressed the global economy into the palm of our hands. It has propelled a revolution through applications involving technological advancements which literally exposes individuals to access a world of information. Smartphones with its highly attractive features are highly desired by many, inflating the revenue earned by most mobile phone companies. A recently held survey in the US revealed that smartphone applications were responsible for the development of more than four lakh jobs in the country itself (Remneland-Wikhamn, et al., 2011). Most developed nations are seen to have similar close by figures when it comes to estimating the total jobs created by way of mobile applications software. However applications can only work uninterruptedly if there is sufficient spectrum allocation by the government. The US leads the world in terms of mobile broadband connectivity and speed. This is one of the prime reasons why internet software’s, applications and other web based networks originate in the US. Network providers are consistently improving their technologies for developing faster broadband connectivity that would further facilitate the growth of the digital economy. Smartphones symbolizes a growing economy and prove how an innovative approach towards technology can propel a nation’s economy forward. Mobile phone companies such as Apple, Samsung, Nokia and HTC are the top brands in terms of Smartphones. These companies are at a stiff race with each other for developing more innovative technologies that help supporting different types of applications and increase their market base (Veijalainen and Tsalgatidou, 2002). Smartphones are increasingly influencing the world in three main areas; the way in which people shop, communicate and access information. Individuals need not wait until getting access to a desktop computer or a laptop for searching matters. Having a smartphone exposes individuals to a world of information and technology just through a few simple clicks. Socializing has reached new horizons as more and more software companies are developing digital platforms based on which individuals can communicate. Twitter and Facebook applications play a significant role in this respect. Smartphones are seen to influence consumer decision making processes as well. People rely upon applications for gaining information relating to the availability of products and services through the web which can be easily accessed through a smartphone. Smartphones have a wide spread target market ranging from youngsters, teenagers, adults and the elderly. In the western countries it is observed that a large section of the elderly people access mobile applications for various purposes. Due to weak health conditions, the elderly sections of the society are unable to consistently step out of their houses for different purposes. As a result they rely on the web for a large number of activities such as making payments, purchasing different items and accessing information for various kinds. Developments of smartphones have further facilitated the aspect of sharing information and accessing different types of information’s (Scharl, Dickinger and Murphy, 2005). Figure 4: Sale of smartphones in the Australian economy (Source: ACMA, 2011) The advanced smartphone technology has not only improved economic performance but also different functions. The last few years have witnessed an immense increase in the sales of smartphones signifying the increasing dependence upon web based applications. The figure above shows the rise in the purchase of mobile phones in Australia. It is for such reasons that the revenues earned by most mobile phone companies and broad band service providers play a significant role in the digital economy. Most smartphone users are seen to access their email accounts, internet banking systems and online databases. This has therefore facilitated the growth of many software companies who support many features on the web and associated applications. Considering the financial sector it is seen that many banks have developed their own applications to support their business and cater to the specific needs of the consumers. There are also certain technical difficulties witnessed in respect of smartphone usage (Liang, et al., 2007). The users of smartphones are required to know how different applications are operated on a smartphone. They are required to have at least the basic knowledge in respect of technology and the internet. Therefore business firms are required to give clear instructions to the consumers who use the applications. There are however many such applications which are based upon complex technologies making it difficult for most individuals to use the same. However the smartphone trend is expected to continue rising, facilitating growth of the digital economy. Economic conditions such as booms and recession periods are also seen to influence the smartphone sales. When consumers cannot afford to purchase high prices smartphones, mobile phone companies try to maintain their market share by scaling back different features and applications. The popularity of smartphones also depends upon the prices of the wireless networks. If data connectivity is priced highly, consumers might refrain from accessing the internet from their smartphones, rendering many applications to becoming ineffectual (Kauffman and Techatassanasoontorn, 2005). Conclusion Most developing nations such as China owe their success to the growth of digital technology. China in the recent past has recorded a recording breaking level of sales of smartphones. It is expected that the new users of smartphones will develop new patterns of online and offline commerce. Many new applications would be conceived that are compatible with mobile phones. There is no doubt that mobile applications play a significant role in the growth and development the digital economy. Digital economy growth significantly contributes towards the GDP of a nation. Mobile application have resulted in the growth of many allied businesses such as goods and service delivery business, media firms, advertising firms and software firms. Technology is growing at such a fast pace that it has the things which are technically possible now were not even imaginable five years back. The unprecedented growth of technology is expected to bring more changes in the manner in which businesses are being conducted. Mobile applications are also consistently improving alongside of technological advancements. It is expected that in the coming age technological growth would be so high that almost all human activities would be dependent upon it. Mobile applications will surge into newer and innovative concepts of business developing highly integrated business models. However it is essential for regulatory authorities to ensure that there are adequate regulations and monitoring mechanisms to prevent unethical activities. The policy of monitoring digital commerce also requires changing and upgrading as more and more revolutionary business themes and concepts emerge out of the digital economy. Reference List ACMA, 2011. Emerging business models in the digital economy-The mobile applications market. [pdf] Australian Communications and Media Authority. Available at: [Accessed 17 May 2014]. Au, Y. A. and Kauffman, R. J., 2008. 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