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ICC Advance Access originally published online on June 22, 2009
Industrial and Corporate Change 2010 19(1):81-116; doi:10.1093/icc/dtp032
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© The Author 2009. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved.

Who profits from innovation in global value chains?: a study of the iPod and notebook PCs

Jason Dedrick, Kenneth L. Kraemer and Greg Linden

Correspondence: Jason Dedrick, Syracuse University, School of Information Studies, 343 Hinds Hall, Syracuse, NY 13244, USA. e-mail: jdedrick{at}uci.edu

Correspondence: Kenneth L. Kraemer, Personal Computing Industry Center, UC Irvine, 5251 California Ave., Ste. 250, Irvine, CA 92697-4650, USA. e-mail: kkraemer{at}uci.edu

Correspondence: Greg Linden, Personal Computing Industry Center, UC Irvine, 5251 California Ave., Ste. 250, Irvine, CA 92697-4650, USA. e-mail: glinden{at}uclink4.berkeley.edu

This article analyzes the distribution of financial value from innovation in the global supply chains of iPods and notebook computers. We find that Apple has captured a great deal of value from the innovation embodied in the iPod, while notebook makers capture a more modest share of the value from PC innovation. In order to understand these differences, we employ concepts from theories of innovation and industrial organization, finding significant roles for industry evolution, complementary assets, appropriability, system integration, and bargaining power.


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