After three straight years of being number 1, Apple Inc. (NASDAQ:AAPL) was recently overtaken by fellow tech rival Google Inc. (NASDAQ:GOOG) in BrandZ annual Top 100 Most Valuable Global Brand rankings. Could this spell disaster for Apple stock?
It took 3 years, but Google is finally back on top.
According to the BrandZ annual Top 100 Most Valuable Global Brand ranking (which calculates current and future earnings that can be attributed directly to a brand rather than to the corporation), Google had a phenomenal 2013 which catapulted the search engine turned tech multi-disciplinarian to first place this time around.
The company is no stranger to BrandZ annual rankings, having been the top business for four straight years before Apple toppled it in 2011 and held on for 3 consecutive years of their own, thanks to their popular line of iPhones and iPads.
But this year’s achievement is likely Google’s most rewarding to date, as it seemingly redeemed itself after a few years of lackluster innovations and product miscues.
At Google X, the experimental sandbox where Google engineers get to let their imaginations run wild, a host of cutting-edge technologies are developed on a regular basis.
Between 2012 and 2013, they introduced a handful of new gadgets and gizmos, some of which received enormous positive responses.
Google’s driverless vehicles have been one of its more notable unveilings, where one car successfully traversed San Francisco’s famous winding Lombard Street.
Its current fleet of test cars is designed to drive at the speed limit it has stored on its maps and maintains its distance from other vehicles using a system of sensors.
Then Google revealed its ambitious Project Loon, a bold experiment to provide Wi-Fi access all over the globe through the launching of hundreds of high-altitude balloons.
Presently two-thirds of the world’s population does not yet have Internet access, so Google’s network of balloons floating near the edge of space is designed to connect people in rural and remote areas.
Last but not least is Google Glass.
This game changing gadget hardly needs any introduction as it’s already been heavily covered and scrutinized by the media ever since testers first got their hands on them a few months ago.
The ability to completely communicate hands free has been a dream of gear heads and tech geeks since forever, and Google’s noble attempt at it certainly wasn’t a disappointment.
As a result, Google’s brand value in 2013 shot up by 40% to $159 billion, surpassing Apple which itself declined 20% to second place with a $148 billion valuation.
Oscar Yuan, VP at Millward Brown commented: “Apple’s been known for earth-shattering, category-creating, revolutionary products. And I would say just recently Apple’s innovations have been more evolutionary than revolutionary. I think that may have played a little bit in the drop from first to second,”
As for Google, Yuan says the company has been doing just the opposite. “Google continues to deliver on bringing to consumers and the business world things they’ve never seen before and things they’ve never imagined were possible. That shows in their brand value.”
Though the BrandZ proprietary formula is kept secret, the research entails communication with over two million consumers and more than 10,000 different brands in over 30 countries.
When calculating brand value, the methodology doesn’t just look at innovations. The brand also needs to have the ability to surprise and delight consumers.
This helps to explain why McDonald’s Corp. (NYSE:MCD) is ranked #5 on the list.
Instead of trying to impress the public with state-of-the-art technology, the fast food giant chooses instead to roll out McCafe – a more comfortable and personal dining experience complete with greater beverage options and free Wi-Fi.
So far, McCafe has been a hit with consumers, and McDonald’s brand value has been rewarded as a result.
Other honorable mentions go out to Amazon (NASDAQ:AMZN), which made a big splash with its flying drones and media-related apps, and social media companies like Twitter (NYSE:TWTR) and LinkedIn (NYSE:LNKD), which made it onto the list for the very first time.
With a host of brands making huge strides in their ability to surprise and delight, Apple’s going to have to come up with something radically different and unique as it had consistently done during the Steve Jobs’ years, if it hopes to stay relevant.
Most interestingly, even with Apple’s 20% value decline, the combined brand value of the Top 100 has nearly doubled since the first ranking was produced in 2006.
Today, the combined brand value of all 100 companies are worth $2.9 trillion, an increase of 49% compared with the 2008 valuation, which marked the start of the banking and currency crisis.
While we could see Google and Apple duke it out for top spot again next year and possibly the year after that, don’t be surprised to see other brands making a legitimate run for it in the very near future.
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