Apple And Microsoft Head The Worlds Most Valuable Brands 2015


Kurt Badenhausen, Forbes Staff

May 14, 2015

Leadership changes are challenging. They can be even tougher when an iconic company founder is replaced. Nike and Starbucks both stumbled after Phil Knight and Howard Schultz stepped down from leading their respective companies. Steve Jobs was ousted from Apple in 1985 and the company entered a near death spiral in the early 1990s. But Jobs returned in 1996 to lead the company to unprecedented heights. In Apple’s latest transition, the train keeps on rolling under CEO Tim Cook, who replaced Jobs in 2011. “The brand promise with Apple is so strong and they continue to deliver on that,” says Kevin Lane Keller, a branding expert and professor at Dartmouth’s Tuck School of Business.

The Apple brand is now worth $145.3 billion by our count, up 17% over 2014. The brand ranks on top of Forbes’ list of the World’s Most Valuable Brands for a fifth straight time and is worth twice as much as any other brand on the planet. The company sold 74.8 million smartphones worldwide in the fourth quarter of 2014 with phone sales up 49%. It was the first quarter Apple sold more phones than Samsung since 2011 (Samsung regained its No. 1 position in the first quarter of 2015). Apple is making money hand over fist with an $18 billion profit in the fourth quarter, up 33% from the prior year.

While Samsung spends nearly $4 billion on advertising to sway consumers, Apple spent only one-third as much at $1.2 billion last year. The company relies on its avid fan base more than Madison Avenue to promote its products.

Apple revolutionized four industries over the past 15 years with the launch of the iPhone, iPad, iPod and iTunes. Its next target is watches. The Apple Watch launched in April. Forecasts for first year sales are all over the map and typically range between eight million and 15 million. Analysts at Piper Jaffrey expect watches to represent 10% of Apple’s 2017 revenue. Keller is skeptical of the potential of the Watch, but recognizes the incredible track record Apple has to produce great products. “If the watch turns out to be a success, it is going to fuel the company and brand even more,” says Keller.

Microsoft ranks as the second most valuable brand worth $69.3 billion, up 10%. After years of getting beaten up in the press and by users, the $94-billion-in-sales company is suddenly cool again under CEO Satya Nadella, just the company’s third leader in 40 years. The company is intriguing developers and introducing captivating products like its HoloLens, a headset which brings hi-def holograms to life using Windows.  “We want to move from people needing Windows to choosing Windows, to loving Windows. That is our bold goal,” said Nadella at the Windows 10 launch event in January.

The company poured $11 billion into research and development last year. Windows 10 will be released this summer and is expected to be the last major release of the venerable operating system. Future updates will be in an “ongoing manner.” The company wants one billion Windows 10 users by 2018.

Microsoft is no longer the 800-pound gorilla in the tech space, which has softened some of the criticism, but Keller is looking for consumers to want to engage with the brand before he labels it cool again. “I can see why people have stopped hating them, but can’t see why people would start loving them,” says Keller.

Rounding out the top five are Google ($65.6 billion), Coca-Cola ($56 billion) and IBM ($49.8 billion).

We determined the most valuable brands by starting with a universe of more than 200 global brands. We required brands to have at least some presence in the U.S., which knocked out big brands like Chinese internet giant Tencent and multinational telecom firm Vodafone. The top 100 includes product brands like Procter & Gamble-owned Gillette as well as brands marketed under their corporate name like IBM.

Forbes valued these 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 and beverages, low for airlines and oil companies). 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), Japan (7) and France (7). Tech brands are the most prevalent with 15, including half of the top 20. Automotive and consumer packaged goods companies both landed 13 brands within the top 100. Toyota was the top auto brand at No. 8, worth $37.8 billion, while Gillette headed the CPG brands at No. 26, worth $20.4 billion.

Facebook registered the biggest gain of any brand in the top 100, up 54%. It cracks the top 10 for the first time with value of $36.5 billion. Facebook had 936 million active daily users as of March 2015 with 83% of those outside the U.S. The brand has emerged as a competitor to YouTube regarding video. In April the company reported that it delivered four billion video views daily compared to one billion just seven months earlier. Other big gainers in the top 100 include: (+32%) and Disney (+26%). Adidas (-14%) and Danone (-13%) had the biggest drops.

Full List: The World’s Most Valuable Brands

This article was written by Kurt Badenhausen from Forbes and was legally licensed through the NewsCred publisher network.

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