Preannouncement Effect of Innovative New Product on Global Telecom Industry: Focused on iPhone

Innovative new product has an influence on society. Apple’s iPhone is such a good example. As Apple’s branding guidelines, it passes the marketing costs onto telecom companies which desire to sell iPhone. For this reason, investors are able to have negative position on these telecom companies. Therefore, preannouncements of innovative new product could negatively impact on telecom industry. Specifically this study uses the event study methods to estimate the preannouncement effect of innovative new iPhone on the telecom industry. This paper finds that iPhone preannouncements have negative effects on the telecom companies selling iPhone under market model.