American high tech companies take charge as the world’s most valuable brands

By Steve Brachmann
October 14, 2015

The world has long understood the value of technology but in 2015, it’s finally becoming clear that some of the world’s most innovative high tech firms possess the world’s most valuable business brands. A recent report on global brand value, produced for 16 years straight by grand consultancy firm Interbrand, found that more than two-thirds of of the world’s ten most valuable brands were technology brands.

The top two spots on the list of the 100 most valuable brands are occupied this year, as last year, by Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG), respectively. These two companies have held their respective spots since 2013, when both were able to ouster The Coca-Cola Co. (NYSE:KO) from the leading position in the Interbrand study, which it had held since Interbrand began releasing the report in 2000. Interbrand’s top 10 global brands include a collection of Companies We Follow often here on IPWatchdog, including 4th-placed Microsoft Corp. (NASDAQ:MSFT), 5th-placed IBM (NYSE:IBM), 7th-placed Samsung Electronics Co. (KRX:005930), 8th-placed General Electric Company (NYSE:GE) and 10th-placed Amazon.com, Inc. (NASDAQ:AMZN). Although considered to be more of an automaker than a high tech company, we often feature the technological developments pursued by Toyota Motor Corp. (NYSE:TM), which placed 6th overall in Interbrand’s global brand value report. For the most part, this year’s top 10 reflects last year’s list with the exception IBM and Microsoft and then GE and Toyota swapping their respective places and Amazon’s addition to the top 10 squeezes out German automaker BMW (ETR:BMW).

Aside from Amazon, each of these companies placed in the top 25 organizations worldwide obtaining patents from the U.S. Patent and Trademark Office in 2014, according to statistics collected by the Intellectual Property Owners Association, and Amazon wasn’t terribly far behind at 59th overall, earning 741 U.S. patents in 2014. There’s a pretty clear correlation here between the numbers of patents earned by these corporations and the global value of their brand. We thought to take this opportunity to look around at the recent business activities for at least some of these top tech developers to see how they’ve been building value in their brands in recent months.

 

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“iPhone, Apple, Phone” by kropekk_pl. Public domain.

Apple Rides the Tidal Wave of Mobile Device Success

Apple was already the world’s most valuable brand but the brand gained an incredible 43 percent in value, the second highest rise in this year’s brand value report behind Facebook Inc. (NASDAQ:FB), leaving it with a brand value that eclipsed $170 billion. The world-renowned computer hardware and software development company based in Cupertino, CA, has established itself as a top player in the field of mobile personal electronics, mainly through the wild success of the company’s iPhone smartphone. As of this March, Apple CEO Tim Cook announced that the company had sold more than 700 million of those units during the product’s lifetime and that Apple’s smartphone sales were outpacing the rest of the industry. Apple is also trying to make headway in the smartwatch sector, although it is facing some tough competition in that field from Samsung.

In the digital wallet sector, Apple had maintained a leading position heading into this year until Google’s February acquisition of Softcard enabled it to set up its own Android Pay system to compete directly with Apple. Currently, the company is locked in a three-way battle for the digital wallet market with both Google and now Samsung, which has developed its own Samsung Pay system which doesn’t require the specialized point-of-sale (POS) terminals needed by Apple Pay and Android Pay. Near the beginning of October, Apple announced the positive news that Starbucks Corporation (NASDAQ:SBUX) would start accepting Apple Pay at some of its stores by the end of the year, a move which is expected to be followed by both KFC, owned by Yum! Brands, Inc. (NYSE:YUM), and Chili’s, owned by Brinker International, Inc. (NYSE:EAT).

It hasn’t been completely smooth sailing this year for Apple. The company’s third quarter earnings report noted that sales of Apple’s Mac personal computer had reached its slowest pace since 2013’s third quarter. However, Apple’s ability to at least maintain its PC sales levels gives it a very strong position in a market in which almost every other competitor is seeing greatly reduced PC sales and shipments. Apple has also been having some troubles in China, the company’s second largest source of revenue, where the company has decided to cease operation of its Apple News app for undisclosed reasons.

In home entertainment, Apple has recently decided to put aside development of an high definition television (HDTV) unit in favor of further development of its Apple TV set-top box, which some commentators believe will offer Apple a better return on its investment than if it had produced its own HDTV. Recent hiring of robotics engineers has many others believing that the corporation may become the next high tech company to get involved in developing automotive technologies.

 

Alphabet_ChartGoogle’s New ABCs: Accelerated Mobile Pages, Boston Dynamics and Chrome

Google’s brand valuation increased by 12 percent in this most recent global brand valuation, eclipsing $120 billion in total value. This fall is an incredibly interesting time for Google, which is undergoing a corporate restructuring which will fold Google’s search engine business and the corporation’s other farflung activities underneath the umbrella of Alphabet, Inc. The corporation announced the move in August of this year and solidified the move by filing a Form 8-K regarding the Alphabet conversion with the U.S. Securities and Exchange Commission on October 2nd. Google’s founders Larry Page and Sergey Brin will serve as Alphabet’s CEO and president, respectively, while longtime employee Sundar Pichai has been promoted to CEO of Google, where he will oversee the search engine and other online business offerings.

Google has never been able to establish itself as a social media giant the way its search engine has maintained a leading position but the corporation is still testing those waters, which we noted in a recent post on a partnership between Google+ and Twitter (NYSE:TWTR) with the development of an instant news platform to compete with Facebook Instant Articles. The platform, known as Accelerated Mobile Pages, seeks to operate as an open source alternative to the news content hosted by Apple and Facebook, which isn’t available outside of those proprietary services. Google has recently been ceding ground to Facebook in terms of selling display ads, so the social media giant is proving to be a much bigger competitor to Google than it would first appear.

The Chrome operating system has been a recent focus of much research and development over at Google and version of its source code have been popping up in a wide array of products created by the company, including the OnHub router recently unveiled by the company. The Android OS for mobile devices has also been incredibly successful although Google has had problems making its Android TV television interface commercially viable over the past year.

The Mountain View, CA-based tech developer is well known for its longshot investments in an incredibly wide range of technologies, pursuing everything from autonomous vehicles to walking robotic animals developed by its wholly-owned subsidiary Boston Dynamics. The corporation’s robotic operations are at the focus of a recent investment made in the German Research Centre for Artificial Intelligence, a nonprofit AI research institute employing hundreds of scientists working on augmented reality and embedded intelligence products. In early October, Google executives appeared at the announcement of a project spearheaded by Israeli nonprofit space engineering company SpaceIL which will seek to land a private spacecraft on the moon.

 

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“Microsoft Sign, Campus, Redmond, Washington, WA” by Wonderlane. Licensed under CC BY 2.0.

Microsoft’s Xbox Lags Behind, but Azure Cloud Could Bring In Billions

Microsoft, headquartered in Redmond, WA, enjoyed an increase in its brand valuation of 11 percent over the past year, ending up with a total valuation of $67 billion. Microsoft has developed hardware and software for mobile computing devices but its Lumia smartphones and Windows Mobile operating system hasn’t managed to muster much of a fight against Google, Apple and Samsung, the dominant players in the mobile field. However, Google recently announced that it would develop first-party apps for Windows Mobile 10, the first time that company’s programs would be available on a Microsoft mobile OS. Overall, the Windows 10 OS has been performing much better than Windows 8 did when comparing adoption rates for both over the course of their first 10 days on the market.

Despite the reduced sales and shipments seen lately in the personal computer sector, Microsoft seems to be doubling down on its fortunes in that consumer market. A longtime provider of operating systems and other software programs for other PC manufacturers, Microsoft has been moving more into the production of computing hardware with its Surface line of tablet computers and laptops released over the past three years. Microsoft’s decision to do away with the Control Panel system access program indicates that future editions of Windows will resemble Microsoft’s earlier versions less and less.

Microsoft’s Xbox video gaming console had been a boon to the company’s overall fortunes during the past decade but it’s been facing a stiff battle from its archrival in this field, Sony Corp. (NYSE:SNE). In early October, Phil Spencer, the head of Microsoft’s Xbox division, admitted that a weak start for the Xbox One has made it incredibly difficult for the console to catch up to sales of Sony’s PlayStation 4, the top-selling console of the eighth generation of video game consoles.

There are other areas of Microsoft’s corporate activities which are much better positioned to earn decent revenues for the technology developer. The company’s Azure cloud computing platform has grown quite a bit since it launched in 2010 and it’s expected to increase from $8 billion in 2015 revenues up to $20 billion in revenues by the year 2018. Microsoft is also getting ready to engage in a tour of North America in the hopes of introducing tech developers to its HoloLens augmented reality wearable headset.

 

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“IBM” by Kansir. Licensed under CC BY 2.0.

IBM’s Cloud is Growing While Watson Spreads its Wings

IBM’s brand value dropped by 10 percent in the 2015 rankings, causing it to slide back one space to #5, but it still enjoyed a brand valuation that exceeds $65 billion. The Armonk, NY-based company has seen increasing revenues rain down upon it from its massive portfolio of cloud technologies, which brought in $7.7 billion to IBM in the year spanning 2014’s first quarter and 2015’s first quarter. As we noted above, IBM does face stiff competition in this sector from cloud rival Microsoft, as well as others like Amazon, Oracle Corporation (NYSE:ORCL) and SAP SE (NYSE:SAP). In early October, Finnish national airline Finnair signed a five-and-a-half year agreement with IBM to create a hybrid cloud platform that would provide digital services like mobile on-flight services and datacenter consolidation. The October acquisition of Chicago, IL-based Cleversafe, which had developed on-site data storage for billions of gigabytes worth of data, continues to increase IBM’s holdings in cloud computing. Around the same time, IBM was announcing a partnership with Dallas, TX-based AT&T Inc. (NYSE:T) for the development of a scalable mobile platform for corporate data security. IBM’s new Bluemix Local cloud software development service will make it easier for businesses to build, test and deploy apps in the cloud and in on-site servers.

IBM’s computing fortunes also rely heavily upon Watson, the cognitive computing platform which is designed with natural language and question-answering techniques which process information in a way that replicates human thinking patterns more so than typical computer processors. In September, IBM secured its first major partner for Watson Health in Teva Pharmaceutical Industries (NYSE:TEVA) for the application of Watson’s data analytics to develop more effective treatments for chronic health conditions. IBM has recently established a new business unit which will seek to find new ways of applying the Watson platform to specific industries, like retail, journalism or restaurants. The division has a workforce of 2,000 employees which will advise companies on how they can best incorporate Watson’s powerful data analytics.

In semiconductors, IBM just announced the exciting news that it had achieved a research breakthrough in carbon nanotube technology, which will enable the development of post-silicon electronics that will continue the increased miniaturization and processing power of computer chips which is presaged by Moore’s Law. The corporation also hopes to pose a challenge to Intel Corporation (NASDAQ:INTC) of Santa Clara, CA, with a new Power System LC line of servers which IBM says are designed to handle data processing faster than Intel’s data workload servers.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 2 Comments comments.

  1. Daniel Serrano October 15, 2015 2:07 pm

    Awesome article, but I’m confused by your opening paragraph. You say that more than two-thirds of the 100 most valuable brands are tech companies, but the report says that “tech brands comprise more than a third of the entire ranking’s value” and “Technology and automotive brands dominate this year’s ranking, holding a combined 28 positions. Technology brands, in particular, dominate—collectively making up more than a third (33.6%)”. I’m confused where the two-thirds come from? Is there something I’m missing?

  2. Steve Brachmann October 16, 2015 10:23 am

    Daniel – I can understand your confusion. It took me a few times going through this to see where the issue was, but I did make a slight gaffe in this writing which will be fixed soon. That sentence should read “two-thirds of the world’s ten most valuable brands.” Seven of those top ten (Apple, Google, Microsoft, IBM, Samsung, GE, Amazon) all have a significant presence in high tech. Toyota’s patent levels could also support the argument that the Japanese automaker is a significant high tech presence too. Does that clear up any confusion? Thank you for pointing it out!