Abstract
Previous research has suggested that a major cause of commoditization within the digital home electronics sector is modularity. However, we do not know why commoditization speed differs among different finished products. This paper focuses on the motivation of a finished product manufacturer to modularize their product, and on the causes of forming a module market. We propose a conceptual framework from this viewpoint. We suggest that the primary causes of product design modularization and the formation of a module market are the diffusion speed of a new product, and module portability from other industries. The primary findings of this study are: (1) If the market for a finished product grows rapidly, manufacturers tend to choose a modular product design. As a result, the product is commoditized faster. (2) If there is a module that can serve as a component for the focal product of another industry, that finished product will result in commoditization.
