Brand accolade just the thing for Apple – Arthur Goldstuck

ArthurGoldstuck2APPLE has been given the perfect regmaker after the share price hangover it suffered when the launch of the iPhone 5s and 5c left the market cold.

This week, it was named the world’s most valuable brand in the annual Interbrand survey of the Best Global Brands.

Significantly, it wrestled the number-one spot away from Coca-Cola, which had held it since the turn of the century.

From a stock market perspective, this may seem out of kilter with recent reality. The share price still languishes almost a third below its highs of a year ago. But the Interbrand survey measures something more than market sentiment.

Operating profit and brand loyalty — two commodities in absurd abundance at Apple — are at the heart of the ranking.

Brand strength is among other things an assessment of the impact loyalty has on current operating profit and the ability to maintain demand into the future.

As long as the “fanboy” culture surrounding Apple continues, those are strengths that will not fade soon.

No fewer than six of the top 10 brands in the world this year are hi-tech companies: Apple, Google, Microsoft, IBM, Samsung and Intel. Of these, Apple, Google and Samsung are all rising.

Apart from the shift in consumer culture, we are also seeing a shift in the nature of loyalty and what drives it.

No longer is an “Intel inside” logo enough to keep Intel on top of its category. It has been pushed down from number eight to nine in the rankings, supplanted by Samsung.

The Korean giant is, like Coke, everywhere. If it maintains its recent track record of matching or leading the best products in almost every category of consumer electronics and appliances — and getting those to global markets in supernaturally quick time — it will also be challenging for that number one ranking in the future.

If Google takes those line honours in the next few years and Samsung follows, that would suggest Apple’s brand value is at the peak of a parabola.

Consequently, its rise to the top will be brief, in the same way as was the rise in its share price to dizzy heights a year ago. But don’t write it off.

As was noted in these pages recently, a reason for lack of investor enthusiasm for Apple is that the market wants it to keep making history while it is focused mainly on making money.

That focus has two targets: making products that keep inspiring loyalty; and making deals that guarantee ongoing profitability.

One of the unspoken secrets of the iPhone’s success is the extent to which Apple has locked North American network operators into long-term contracts that guarantee minimum orders. That means, despite investor or analyst disappointment, each new iPhone is a guaranteed money-spinner for Apple.

It’s not only cutting-edge devices that put Apple on top, but also cutting-edge business models. That, arguably, is less simple to copy than a mere handset.

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