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Flash Memory Card Market Dynamics: Insights from Empirical Analysis

Explore the lack of standardization in the flash memory market, effects of conversion technology, network dynamics, and future possibilities based on Zhu's Harvard study. Discover how converters impact prices, market concentration, and network effects.

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Flash Memory Card Market Dynamics: Insights from Empirical Analysis

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Presentation Transcript

  1. Comments on Liu, Kemerer and Smith’s “Standards Competition in the Presence of Digital Conversion Technology: An Empirical Analysis of the Flash Memory Card Market” Feng Zhu Harvard University

  2. Overview • Motivations • Why is there no standardization in the flash memory market? • What distinguishes the flash memory market from other similar markets? • Empirical Results • Positive association between prices and installed bases • Adoptions of converters reduce price premium for the leading formats than that of the minority formats • Market concentration decreases with adoptions of converters

  3. Strengths • New industry • Great dataset • Monthly sales and prices data for different flash formats and converters • First empirical study on the effect of conversion technology

  4. Network Effects • Sources of network effects • Exchange content with other consumers • Reuse the same flash memory in the next digital device • Manufacturers want to make their device compatible with the standard with a large market share • Converters help avoid the tendency towards standardization • Are network effects strong? • What is the mechanism in which converters help avoid standardization? • Consumer multi-homing?

  5. Empirical Results • Relationship between price and installed base • Network effects • Economies of scale

  6. Empirical Results • Measure for market concentration (capacity, size, read/write speed) • Casual relationship

  7. Possible Future Work • Relationships among memory makers, and between memory makers and device makers • Why are some flash formats losing market shares?

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