Chapter One: Introduction1.1 Topic RationaleAfter Apple created the first smartphone app store in July 2008, Apple's App Store grew from just 500 to over 425,000 apps and has generated 15 billion downloads (Dredge, 2011a). ). Additionally, the huge sales of iPhone and apps helped each other strengthen the snowball effect. Apple's innovation not only brings substantial profits to the company, but also establishes a new sales model for smartphone software. The app store provides a convenient and efficient software sales platform for third-party software developers, enabling them to participate with unprecedented enthusiasm (Singh, 2011). This new change adapts to the growing demand for personalization from mobile users, which helps the smartphone software industry enter rapid and healthy development (Singh, 2011). Due to the great success of Apple's App Store, more and more companies such as mobile phone manufacturers, Internet companies and mobile operators have followed Apple's step to join this market which makes the App Store a hot spot for businesses. In other words, Apple's success makes the App Store The store becomes the symbol of the new economic model. Many followers such as Google Android Market, Nokia Ovi Store, Microsoft Marketplace and even many individual developers participate in this business activity (Protalinski, 2011). In fact, how this new type of business model influences the traditional sales mode of telecommunications and how Apple integrates the upstream and downstream value chain deserves further study. According to Chesbrough and Rosenbloom (2002), a successful business model can not only create value, but also maintain the value obtained from competitors, while maintaining costs and prices... middle of paper ..... .t, mobile phones are only used for voice and text services. However, with the development of communication technologies, the mobile phone provides not only voice and text messaging functions, but also high-speed mobile Internet access (Miller, 2010). Third generation (3G) technology takes people from the era of computer networks to the era of mobile phone networks, which allows people to enjoy Internet service through smartphones without sitting in front of a computer. According to GSMArena (2010), the number of 3G subscribers reaches 500 million worldwide. In addition, 3G technology accelerates the development of smartphones, receiving and sending emails, watching videos online, listening to music on the cloud and even managing your bank account without a computer are becoming possible (Miller, 2010). Therefore, all the needs bring a huge opportunity for third-party app developers..