Consumer valuations on digital product innovation

This research aims to empirically investigate consumer valuations on digital product innovation. For the initial appreciation, we attempt to evaluate how hardware-, software-, and design-related innovative improvements in smartphones (i.e., iPhones) have different impacts on consumer valuations on the products. Text-mining techniques are adopted for identifying and classifying consumer valuations on hardware-feature, hardware-design, and software-feature components from 6,970 customer reviews on Apple iPhones. The classification information is utilized in the empirical analysis to assess the distinctive impacts of different product innovation approaches on consumer valuations. Our preliminary outcomes suggest that a consumer's perception on digital product innovation is associated with the scope (single vs. multiple features) and degree (minor vs. major improvements) of a product innovation. While minor single-factor improvements in a product lead consumers to value easily observable innovation components only (e.g., product design), major multi-factor improvements make consumers appreciate its actual functionalities and features made from the innovation.