Valuation of innovation: The case of iPhone
AbstractWe study the value of innovation in a case study of one of the most visible innovative products in recent years, Apple’s iPhone. The value effects of news announcements, patent publications, and trademarks relating to iPhone are taken into account. Our estimate of the lower bound on the value of iPhone is fairly high, 30 billion U.S. (event-day) dollars or 10% to 13% of the firm’s market cap (at the end of 2009). We find that patentable technology explains about 25% of the total value, which derives from market reactions to publication of patent applications rather than grants. We also observe a weak negative reaction among Apple’s rivals to news about iPhone. Apple appears to capture most of the value within the iPhone supply chain.
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Bibliographic InfoPaper provided by Bank of Finland in its series Research Discussion Papers with number 24/2012.
Length: 40 pages
Date of creation: 17 Jul 2012
Date of revision:
innovation management; intellectual property rights; valuation; event studies;
Other versions of this item:
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-23 (All new papers)
- NEP-INO-2012-07-23 (Innovation)
- NEP-IPR-2012-07-23 (Intellectual Property Rights)
- NEP-TID-2012-07-23 (Technology & Industrial Dynamics)
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