Working Paper: NBER ID: w27754
Authors: Roberto Fontana; Shane Greenstein
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’s 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: Centrino; Wi-Fi; Supply Chain; Platform Leadership
JEL Codes: L63; M21; O32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Centrino launch (L63) | increased likelihood of exit from Wi-Fi card markets (L96) |
| Centrino launch (L63) | increased likelihood of exit from internal Wi-Fi card markets (L96) |
| Centrino launch (L63) | stimulated product introductions in complementary markets (O36) |
| Centrino launch (L63) | increased likelihood of product introductions in low-end markets for firms with prior experience in Wi-Fi cards (L15) |
| Centrino launch (L63) | no advantage in product introductions in high-end markets for firms with prior experience in Wi-Fi cards (L15) |