Technology Market Dynamics: Fifth Generation Networks and Huawei Market Leadership

by Gurumurthy Kalyanaram


The extant research has established that there is a pioneering market share advantage when the product category is successful, and under certain other conditions. This finding has been found across many product categories. Applying this database of empirical knowledge, the paper addresses the following two important research questions. 1. How does the market share advantage to early entrants impact the Fifth Generation (5G) network technology market structure? 2. How is financial strength of a firm related to market entry of its brand? To analyze and understand these questions of import, we examine the Fifth Generation (5G) network market. And in this context, we assess the position of the market pioneer Huawei and other players. We show that the early entrants enjoy a sustained market share advantage in technology product/service markets. More specifically, we show that the market share advantages (disadvantages) can be quantified in a monotonic relationship using a generalized empirical formula. We also show that financially stronger firms (operationalized by percentage change in earnings per share) tend to enter the market early, and thus secure the market share advantage. Huawei benefits from these market phenomena.

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