Unlike Vulcans, we’re not creatures of logic as much as we are creatures of contrast. Here is yet another story that compares Apple to apples and fails– as they often do– to bring value to a discussion.
Apple’s brand value has been surpassed by Google. That hasn’t happened for a few years, but it did this time around thanks to a huge jump by Google and an even more precipitous fall by Apple. At least, that’s the story of the folks who attempt to calculate a value for a brand. As one who makes a living in the branding game, I’ll be the first to find a few flaws in the comparisons.
Customers vs. Users
Years ago Brand Finance came up with a methodology to value brands. It’s something like a Top 10 List of brand name recognition, but different because a dollar amount is assigned to each major brand, and the calculations of such would give you a four Advil headache on a three dog night.
Regardless, Apple’s perch was unseated by nemesis Google, but not by much, and certainly within any margin of error such financial shenanigans should have by default, $109.4-billion to $107.1-billion. That’s still a lot of value. But why did Google have a sharp increase while Apple had a sharp decrease in brand value?
Perception and perspective. Google is considered a technology innovator and Apple is no longer considered the innovation leader it was in the past. That’s about it. Move along. Nothing to see here.
Alright. If you must know, Brand Finance explains it:
Apple has over-exploited the goodwill of its customers, it has failed to generate significant revenues from newer products such as the Apple Watch and cannot demonstrate that genuinely innovative technologies desired by consumers are in the pipeline
And what was Google’s innovation in 2016? A smartphone that rivaled Apple’s iPhone 6s from 2015. During much of 2016 Apple was castigated in the tech media and market for iPhone 7 and iPhone 7 Plus as products too lame for prime time when compared to the competition. And then there was Watch and MacBook Pro and iPad and Tim Cook and Sir Jonny Ive’s extended leaves and dividends and stock buybacks and all the things everyone paid attention to except what matters.
Its brand has lost its luster and must now compete on an increasingly level playing field not just with traditional rival Samsung, but a slew of Chinese brands such as Huawei and OnePlus in the smartphone market, Apple’s key source of profitability.
Uh huh. Sure. Methinks this analysis is somewhat more, uh, um, how shall I put this– scurrilously representative and more subjective than it is a mathematical formula than anything else.
First, Apple has customers. For the most part, Google does not. Google sells advertising. Google’s Pixel and a few other products sell to consumers, yet, but their numbers in total are rounding errors compared to a few hundred million customers who buy actual products from Apple every year. It’s customers vs. users here, folks. Reality vs. perception. Apple deals in the former, Google owns the latter.
Second, Google’s public relations division is second to none because the company invests in PR, not in products that actually ship to customers and generate revenue that can be counted. Critics say Apple is too dependent upon the iPhone for revenue and profit at less than 70-percent, yet Google and Alphabet (what Google was before) are dependent upon advertising to the tune of more than 90-percent. Where’s the outrage? Apple’s recent quarterly profit was almost the same as Microsoft’s recent quarterly revenue, and profits were about the same for Apple as for Google, Microsoft, Samsung, and Amazon. Combined.
Most everything Apple makes is hardware; hardware which customers buy. And all that bad noise in 2016 about the lame iPhone 7 and lame Watch and lame MacBook Pro led to record revenue in Q1, record sales, and just a hair shy of record profits, which begat a surge to near the record stock price and stock market valuation.
What did Google do that increased the company’s brand value so so much? It ain’t math.
Google’s parent company Alphabet, stopped spending money on a number of R&D moonshot projects that were losing money hand over fist, so there’s that. Failure. Google decided not to build a Google Car. So, that, too. More failure. Google Pixel is selling well but not well enough for Google to announce numbers.
Regarding brand value, I would put more value into GOOG if the company had more real customers. Even Amazon has more customers than Google. Microsoft has more customers than Amazon. Apple has more customers than all of them. Combined. Otherwise, it looks like a typical list of negative news about Apple can impact the company’s so-called brand value with those who track such things. It’s a good thing customers don’t think the same way.