Abstract: In the high-tech fields, manufacturer is often faced with the tradeoff of technological advantage and demand advantage:the technology open strategy will not only expand the market scale and increase the product demand, but also reduce the cost of product components and parts, which will increase corporates profits; meanwhile, after the opening of technology, new manufacturers will enter the market and compete with the technology-leading enterprises, which will reduce the market share of enterprises and their ability to control the market. Therefore, the choice of appropriate technology strategy (open/closed) has gradually become an important decision for manufacturer.
When choosing technology strategies, manufacturer often takes three factors into consideration:(1) Network externality. The existence of network externality makes the utility of consumers improve with the increase of the scale of consumer, which makes the technology open environment conducive to the potential market demand; (2) Economies of scale. The existence of economies of scale makes the cost of components and parts fall as the market demand increases. (3) New manufacturers. When manufacturer chooses technology open strategy, new manufacturers can obtain the technology for free and participate in market competition, which reduces the market share of manufacturer. Network externality and economies of scale constitute the market condition, which determine whether the manufacturer is willing to provide products for a certain market, while the entry of new manufacturers will change the existing market share and thus affect manufacturer's profit, these three factors affect each other and jointly determine the manufacturer's technology strategy.
Within the framework of product demand theory, the choice of manufacturer's technology strategy is studied. By establishing the manufacturer's technology strategy model, the influence of product network externality, economies of scale and new manufacturers' optimal profits in is analyzed different technology strategies, and the technology strategy of the manufacturer, the market entry strategy of new manufacturers and the corresponding market outcome are obtained. At last, the research is extended, and the change of strategies and market outcomes are studied when there are multiple new manufacturers and when there is market entry cost.
It is shown that:(1) The greater the influence coefficient of new manufacturers' number on the total market potential demand, the more manufacturer tend to adopt the technology open strategy; (2) Moderate strengths of network externality and economies of scale are favorable for manufacturer to adopt technology open strategy; (3) When the number of new manufacturers increases, the change direction of the manufacturer's technology strategy is determined by its initial technology strategy; (4) The market entry cost will not affect the manufacturer's technical strategy, but will change the market entry strategy of new manufacturers under the technology open strategy, and then differentiates the market outcome; (5) The patent fee will stimulate manufacturer to adopt technology open strategy.

Key words: technology open strategy, network externality, economies of scale, new manufacturers, market entry cost