From Interdependent to Modular Design
Ecosystem disaggregation upends existing business models that are predicated by specialized technology, control, and a tight integration of the cellular domain. Open and disaggregated ecosystems point toward a gradual evolution in product architecture from integrated designs toward modular stacks. This enhances flexibility but it changes the industry structure from vertically integrated to horizontally stratified. For example, an ‘all-in-one’ approach championed by integrated vendors is eventually complemented by ‘best-of-breed’ modular solutions provided by new suppliers. In other words, the modular nature advocated in a number of key industry trends (e.g., cloud innovation, 5G core, Open RAN) which alters the industry structure. Modularity opens new opportunities for independent, non-integrated vendors to sell, buy, and assemble plug-compatible components and subsystems.
Broadly speaking, modularity enables the disaggregation of the industry. This, in turn, gives rise to a diluted degree of differentiation because a population of non-integrated vendors…
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