Centrino and the Restructuring of Wi-Fi Supply

Roberto  Fontana; Shane  Greenstein

Working Paper | 2020

Centrino and the Restructuring of Wi-Fi Supply

Abstract

In this paper we examine Intel’s launch of Centrino and interpret it as platform leader’s attempt to restructure a supply chain. We provide a narrative of key actions and how they coordinated changes and offer a framework of the predictable consequences for complementary markets. We then collect data and test these predictions on outcomes in several related complementary markets. The overall findings are consistent with our framework. We show that the launch of Centrino increased the likelihood of exit from internal and external Wi-Fi cards markets, and we find that the magnitude of the effect was largest for internal cards. We also show that the launch of Centrino stimulated product introduction in the markets for complements overall and find that the effect varied across type of routers. Finally, we show that experience with producing Wi-Fi cards shaped product introduction by router providers.

Keywords: Wireless Technology; Product Launch; Supply Chain; Restructuring; Framework;

Language: English

Format: Electronic

Find at Harvard Read Now

Citation:

Fontana, Roberto, and Shane Greenstein. "Centrino and the Restructuring of Wi-Fi Supply." NBER Working Paper Series, No. 27754, August 2020.

This study provides an analysis of the entry strategies of third-party data centers in the United States, an industry with assets worth hundreds of billions of dollars. We examine the market in 2018 and 2019, and compare with the physical entry of private data centers for services on demand, including those known as cloud services. We find evidence that providers of third-party data centers trade off the tensions between buyer distaste for distance, which creates localized demand, and costs of supply, which vary with density. We find considerable evidence that localized demand and economies of scale shape entry decisions. We conclude that data centers display tendencies towards urban-biased technical change, and cloud services mildly work to ameliorate such biases. We see little evidence to suggest data centers will spread to any but a small number of low density locations.

Several decades of expansion in digital communications, web commerce, and online distribution have altered the U.S. labor market for IT workers. We characterize the shifts in regional IT labor markets from 2000 to 2018, and find that IT wage growth did not follow an exceptional pattern compared to broader STEM labor market trends. Digital wage inequality increased, almost entirely due to rising local premiums in a few urban metropolises, where wage spreads became narrower than elsewhere. The supply of college-educated workers accounted for a substantial share of the total wage difference between IT labor markets in top locations and other cities. Agglomeration and IT innovation explained a notably larger fraction of the top-location wage premium in more recent years.

Does more activity in open source lead to more entrepreneurial activity and, if so, how much, and in what direction? This study measures how participation on the GitHub open source platform affects the founding of new ventures globally. We estimate these effects using cross-country variation in new venture foundings and open source participation. The study finds that a 1 percent increase in GitHub commits (code contributions) from people residing in a given country generates a 0.1-0.5 percent increase in the number of technology ventures founded within that country, a 0.6 percent increase in the number of new financing deals, a 0.97 percent increase in financing value, a 0.3 percent increase in the number of technology acquisitions, and a 0.1-0.5 percent increase in the number of global and mission-oriented ventures. The analysis develops an approach to identification based on various instrumental variables and shows that these associations can support causal inferences. We conclude that OSS contributes to different rates of entrepreneurship around the world and therefore can act as a policy lever to improve economic development and can also indicate promising investment opportunities.

Faculty & Research

Centrino and the Restructuring of Wi-Fi Supply

Abstract

Citation:

About the Author

More from the Author