Research Discussion Papers, Bank of Finland
No 24/2012:
Valuation of innovation: The case of iPhone
Timo Korkeamäki ()
and Tuomas Takalo ()
Abstract: 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.
Keywords: innovation management; intellectual property rights; valuation; event studies; (follow links to similar papers)
JEL-Codes: G14; O32; O34; (follow links to similar papers)
40 pages, July 17, 2012
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