Platform envelopment (original) (raw)

Platform envelopment refers to one platform provider moving into another one's market, combining its own functionality with the target's, to form a multi-platform bundle. The markets which evolve rapidly are rich in enveloping opportunities and the companies in these markets are under the continuous threat of becoming obsolete. Mobile phones used to be a separate market but the boundaries between them and music players are beginning to blur. A stand-alone business when threatened with an envelopment attack has few options but to change the business model or sell off the business to the attacker. RealPlayer was a dominant player in the streaming video business and had created a two sided market out of which the consumers were the subsidized side. The content providers were the money side wh