Apple Dominates List Of The World's Most Valuable Brands
Apple has set the bar incredibly high over the past decade. The expectations have some fans grumbling about the lack of transformational products during recent launches. The company has largely upgraded existing product lines instead of releasing anything as revolutionary as its last huge category changer in 2010, the iPad. Speculation swirls about whether the Cupertino, Calif.-based company has peaked, with well-funded competitors like Samsung and Google also challenging Apple. Wall Street seems to think so — Apple’s stock plummeted 45% from its September 2012 high before partially recovering in the past six months.
But Forbes’ study of the top brands illustrates that the Apple name is as strong as ever. Apple is the most valuable brand in the world for a third straight time at $104.3 billion, up 20% over last year. It is worth nearly twice as much as any other brand on the planet by our count.
“The heart of a great brand is a great product,” says Kevin Lane Keller, branding expert and professor at Dartmouth’s Tuck School of Business. Apple remains a vital part of people’s everyday lives, and the brand continues to capture consumer’s imaginations (and wallets) in a range of products across different industries.
The company sold a record 33.8 million iPhones in its latest quarter. It also moved 14.1 million iPads and 4.6 million Macs. Roughly 30 billion songs have been sold on iTunes since it launched in 2003. Sales of iPods are down, as people turn to their phones as music players, but Apple still sold 3.5 million iPods in its fiscal fourth quarter and 26.4 million for the year.
Design has been a large contributor to the strength of the Apple brand. “Design is how a product works, how it looks, how it feels. It’s functional and aesthetic. Apple has embraced that in the fullest sense possible in terms of making products simple, but also good looking and attractive,” says Keller.
The World’s Most Valuable Brands
Microsoft ranks second with a brand worth $56.7 billion. The value of the brand is flat over the past three years, as Microsoft struggles to make the transition from a PC to a mobile world. Growth has slowed, but it is still one of the most profitable brands in the world with operating margins of 34% in its latest fiscal year. The company’s $2.6 billion ad budget is one of the biggest in tech.
Coca-Cola is the only non-tech brand to crack the top five, ranking No. 3 with a brand value of $54.9 billion. Coca-Cola sold 13.5 billion cases of its signature drinks in 2012, up 3% from the prior year thanks to growth outside the U.S. Those sales represent half of the company’s soda revenue. The brand became the first to record 50 million “likes” on Facebook last year and currently has 75 million fans on the social media site.
To determine the best brands, we started with a universe of more than 200 global brands. We required brands to have a presence in the U.S., which eliminated some big brands like multinational telecom firm Vodafone and state-owned China Mobile, which is the world’s largest mobile phone provider. The final list includes product brands like Proctor & Gamble-owned Gillette and corporate brands like IBM, which ranks fourth.
Forbes valued the brands on three years of earnings and allocated a percentage of those earnings based on the role brands play in each industry (e.g., high for luxury goods, low for airlines). We applied the average price-to-earnings multiple over the past three years to these earnings to arrive at the final brand value (click here for the full methodology).
The 100 most valuable brands span 15 countries across 20 broad industry categories. Brands from U.S.-based companies make up just over half the list with the next biggest representation from Germany (9 brands), France (8) and Japan (7). Tech brands are the most prevalent with 19, including six of the top 10.
Ninth-ranked Samsung had the strongest one-year gain of any brand in the top 100, up 53% to $29.5 billion. Samsung’s value soared 136% over the past three years. Sales for Samsung’s Galaxy S4 smartphone have been on fire and the company also benefits from its market leading position with memory chips. Samsung’s smartphone shipments rose 40% to 81.2 million in the third quarter, according to IDC. Its 31.4% market share is larger than the next four brands combined.
Samsung has poured money into marketing, particularly in sports, to highlights its innovative products. South Korean-based Samsung Electronics has been an Olympic sponsor since the 1988 Seoul Olympic Games. It uses global sports stars like track and field’s Usain Bolt and figure skater Kim Yu Na in its advertising. Samsung’s most high profile sports team deal is its $24 million a year jersey sponsorship of European soccer champion Chelsea. The company’s ad budget hit $4.4 billion last year.
“Really strong brands are highly innovative and highly relevant, so they are always moving forward in the right direction with products and services that really appeal to people and are distinctive and different,” says Keller.
Samsung and Apple have been on remarkable runs, but they only need to look across the mobile space to see how quickly the value of a brand can collapse in the complex, fast moving technology world. Forbes valued the Blackberry brand at $6.1 billion last year, but just $2.2 billion this year and outside the top 100. Three years ago, Forbes deemed the Nokia brand worth $27.3 billion, ninth highest in the world. Today we figure it is worth $7 billion, which ranks No. 71. The value is down 55% from last year as the brand, like Blackberry, has been left behind in the smartphone world.
Nokia was the world’s leading market of mobile phones for 14 years until early 2012, but they failed to read the market and adapt to the consumer’s move to smartphones. Nokia still ranks second behind Samsung in global shipments in the low-priced, stagnant mobile phone category with a 13.8% market share, according to IDC. But Nokia is almost irrelevant in the high-priced, exploding smartphone area. Nokia sold 8.8 million of its Lumia smartphones in the third quarter—up 19% from the prior year, but Samsung sold nine times as many smartphones with unit growth twice as fast. Keller isn’t hopeful about a Nokia revival and adds, “In such a fast moving category and industry, it is murder to catch up once you fall behind.”