Valuation of innovation: The case of iPhone
We 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.
|Date of creation:||17 Jul 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.suomenpankki.fi/en/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tkac, Paula A., 1999. "A Trading Volume Benchmark: Theory and Evidence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 34(01), pages 89-114, March.
- Nicholas Bloom & John Van Reenen, 2010.
"Why Do Management Practices Differ across Firms and Countries?,"
Journal of Economic Perspectives,
American Economic Association, vol. 24(1), pages 203-24, Winter.
- Nick Bloom & John Van Reenen, 2010. "Why do Management Practices Differ Across Firms and Countries?," CEP Occasional Papers 26, Centre for Economic Performance, LSE.
- Nick Bloom & John Van Reenen, 2010. "Why do management practices differ across firms and countries?," LSE Research Online Documents on Economics 47491, London School of Economics and Political Science, LSE Library.
- Klaus Kultti & Tuomas Takalo & Juuso Toikka, 2006. "Simultaneous Model of Innovation, Secrecy, and Patent Policy," American Economic Review, American Economic Association, vol. 96(2), pages 82-86, May.
- James Bessen & Robert M. Hunt, 2007.
"An Empirical Look at Software Patents,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 16(1), pages 157-189, 03.
- Chaney, Paul K & Devinney, Timothy M & Winer, Russell S, 1991. "The Impact of New Product Introductions on the Market Value of Firms," The Journal of Business, University of Chicago Press, vol. 64(4), pages 573-610, October.
- Jyrki Ali-Yrkkö & Petri Rouvinen & Timo Seppälä & Pekka Ylä-Anttila, 2011.
"Who Captures Value in Global Supply Chains? Case Nokia N95 Smartphone,"
Journal of Industry, Competition and Trade,
Springer, vol. 11(3), pages 263-278, September.
- Ali-Yrkkö, Jyrki & Rouvinen, Petri & Seppälä, Timo & Ylä-Anttila, Pekka, 2011. "Who Captures Value in Global Supply Chains? Case Nokia N95 Smartphone," Discussion Papers 1240, The Research Institute of the Finnish Economy.
- Carl Shapiro, 2001.
"Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting,"
in: Innovation Policy and the Economy, Volume 1, pages 119-150
National Bureau of Economic Research, Inc.
- Carl Shapiro, 2003. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting," Law and Economics 0303005, EconWPA.
- Shapiro, Carl, 2000. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting," Competition Policy Center, Working Paper Series qt4hs5s9wk, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Carl Shapiro, 2004. "Navigating the Patent Thicket: Cross Licenses, Patent Pools and Standard Setting," Levine's Working Paper Archive 122247000000000539, David K. Levine.
- Bronwyn H. Hall & Grid Thoma & Salvatore Torrisi, 2009.
"Financial Patenting in Europe,"
NBER Working Papers
14714, National Bureau of Economic Research, Inc.
- Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
- Griliches, Zvi, 1981.
"Market value, R&D, and patents,"
Elsevier, vol. 7(2), pages 183-187.
- Lerner, Josh, 2006. "The new new financial thing: The origins of financial innovations," Journal of Financial Economics, Elsevier, vol. 79(2), pages 223-255, February.
- Sheng-Syan Chen & Kim Wai Ho & Kueh Hwa Ik, 2005. "The Wealth Effect of New Product Introductions on Industry Rivals," The Journal of Business, University of Chicago Press, vol. 78(3), pages 969-996, May.
- Nicholas Bloom & John Van Reenen, 2002. "Patents, Real Options and Firm Performance," Economic Journal, Royal Economic Society, vol. 112(478), pages C97-C116, March.
- A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
- Karan Girotra & Christian Terwiesch & Karl T. Ulrich, 2007. "Valuing R& D Projects in a Portfolio: Evidence from the Pharmaceutical Industry," Management Science, INFORMS, vol. 53(9), pages 1452-1466, September.
When requesting a correction, please mention this item's handle: RePEc:hhs:bofrdp:2012_024. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Minna Nyman)
If references are entirely missing, you can add them using this form.