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Valuation Of Innovation: The Case Of iPhone

The authors estimate the private value of Apple's iPhone by observing abnormal stock market reactions to news announcements and patent publications related to the innovation. The estimate of the lower bound on the market valuation of iPhone is fairly high, at minimum 30 billion U.S. (event day) dollars. They find that patentable technology explains about 25% of that total value. They 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.

Provided by: Munich Personal Repec Archive Topic: Innovation Date Added: Jan 2011 Format: PDF

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