Apple’s Big Loss Crowns a New King
I joked a few years ago that Google (Nasdaq: GOOG) would soon take over the world.
Turns out, I wasn’t far off…
This week, Google usurped Apple (Nasdaq: AAPL) for the title of the world’s most valuable brand.
To create its BrandZ Top 100 Most Valuable Global Brands, Millward Brown combined financial data with consumer measures of brand equity database to determine brand values. The values seen in the list represent the present value of the earnings a brand is expected to generate in the future.
With a 40% year-over-year increase that puts its brand value at almost $160 billion, Google secured its place at the top of BrandZ’s rankings.
According to Millward’s managing director, Nick Cooper, it’s Google’s innovative tendencies that helped it edge out the competition.
“Google has been hugely innovative in the last year with Google Glass, investments in artificial intelligence and a multitude of partnerships that see its Android operating system become embedded in other goods, such as cars,” said Cooper.
“All of this activity sends a very strong signal to consumers about what Google is about, and it has coincided with a slowdown at Apple.”
And what a slowdown it was.
After three years as No. 1, Steve Jobs’ brainchild saw the value of its ubiquitous Apple brand plummet by 20%. That puts its brand value at $148 billion - firmly demoting Apple to the No. 2 spot on the list.
So what does this all mean for investors?
Really, the ranking is not nearly as important as the overall trend. The fact that the value of the Google brand is rising bodes well for its investors.
Strong brands and, therefore, high consumer demand mean Google and Apple can demand high prices for their products, which offset expenses and force competitors to compete on price, not quality. For long-term investors with stakes in a company with a high brand value, this typically translates to above-average returns.
With a market cap that trails Apple by more than $150 billion - and in light of the subtle yet newfound doubt surrounding Apple’s future - all indicators say that Google’s reign will be the next Golden Age for investors.