What can we learn by comparing Apple’s patent counts with their financial data? It turns out, there’s a strong correlation between the two.
The story of Apple Inc. is exciting and tumultuous, as one might expect from the most profitable company in the world. From a partnership in a garage that drove the beginnings of personal computing, through a decline in the early 1990s, Apple surged back in the mid-2000s to their current status as an ever-climbing industry giant. Beyond the dramatic human element of charismatic leadership and compelling design and branding, the sheer financial growth is well worth analyzing. And, as with anything worth understanding, it's complex and resists a simple explanation.
What can we learn by comparing Apple's patent counts with their financial data? It turns out, there's a strong correlation between the two. Apple's utility patent counts are relatively even from 1995 - 2007, but rise sharply starting in 2008. Similarly, Apple's earnings per share (in this case, a direct reflection of their profit) starts rising in 2005. What can we conclude from this?
As always, we must be careful not to stamp our analysis with a conclusion prematurely. Does this correlation point to a causation? And, even if it does, in which direction? Does greater profit and revenue generate greater R&D budgets, thereby increasing patent generation, or do patents (in general) generate profit and revenue directly? Or is it some mix of the two?
To better understand the subtleties here and build confidence in our conclusions, we would need to observe this same relation for other companies. What about Microsoft, IBM, Intel, and Samsung? Do we find the same correlation, or does the data point toward a more complex model?
Sources:
Final Tabulation - Patenting by Organizations Report, Single Year Reports, 1995 to Present
http://www.uspto.gov/web/offices/ac/ido/oeip/taf/reports_topo.htm
Wolfram Alpha - Apple EPS
http://www.wolframalpha.com/input/?i=apple+eps
Wolfram Alpha - Apple Revenue
http://www.wolframalpha.com/input/?i=apple+revenue
Wolfram Alpha - Apple Profit
http://www.wolframalpha.com/input/?i=apple+profit
NeXT acquisition press statement
https://web.archive.org/web/19990128101420/http://product.info.apple.com/pr/press.releases/1997/q2/970207.pr.rel.next.html
iMac Release statement
https://web.archive.org/web/20010306050849/http://www.apple.com/pr/library/1998/aug/13mktg.html
iPod Article
http://www.apple.com/pr/library/2001/10/23Apple-Presents-iPod.html
iPhone Release statement
http://www.apple.com/pr/library/2007/01/09Apple-Reinvents-the-Phone-with-iPhone.html
iPad Release statement
http://www.apple.com/pr/library/2010/01/27Apple-Launches-iPad.html
When you click on any of the above links within the Tableau visualization you will be leaving the United States Patent and Trademark Office (USPTO) Open Data Portal. The USPTO does not necessarily endorse the views expressed or the facts presented on this site. Further, the USPTO does not endorse any commercial products that may be advertised or available on this site. You may wish to review the privacy notice on those sites since their information collection practices may differ from ours.