Valuation of innovation: The case of iPhone
We estimate the private value of Apple’s iPhone by observing abnormal stock market reactions to news announcements and patent publications related to the innovation. Our estimate of the lower bound on the market valuation of iPhone is fairly high, at minimum 30 billion U.S. (event day) dollars. We find that patentable technology explains about 25% of that total value. We also find a weak negative reaction among Apple’s rivals to the news about iPhone but no significant reaction to the publication of patent documents concerning iPhone can be observed. The evidence suggests that the value of iPhone primarily stems from Apple’s management and marketing abilities and efforts rather than from underlying "hard" technologies and intellectual property.
|Date of creation:||28 Dec 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
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.:
- James Bessen & Robert M. Hunt, 2004.
"An empirical look at software patents,"
03-17, Federal Reserve Bank of Philadelphia.
- 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, 2001. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," NBER Chapters, 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.
- Carl Shapiro, 2004. "Navigating the Patent Thicket: Cross Licenses, Patent Pools and Standard Setting," Levine's Working Paper Archive 122247000000000539, David K. Levine.
- Hall, Bronwyn H. & Thoma, Grid & Torrisi, Salvatore, 2010.
"Financial Patenting in Europe,"
MERIT Working Papers
011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Nicholas Bloom & John Van Reenen, 2002. "Patents, Real Options and Firm Performance," Economic Journal, Royal Economic Society, vol. 112(478), pages C97-C116, March.
- 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.
- A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Griliches, Zvi, 1981.
"Market value, R&D, and patents,"
Elsevier, vol. 7(2), pages 183-187.
- 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.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:28042. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.