BusinessWeek: Apple #50 In Top Global Brands, Microsoft #2, Dell #29

by , 10:00 AM EDT, August 18th, 2003

BusinessWeek published a listing of the Top 100 global brands earlier this month. We missed it, but fortunately our friends at MacCentral noticed it this weekend. The listing, the 2003 Global Brands Scoreboard, is part of an article called Brands in an Age of Anti-Americanism, which is itself part of an annual ranking of the top global brands. This year's emphasis is how American and non-US company brands alike are faring at a time of unprecedented anti-US sentiment around the globe.

In this year's survey, Apple held the same placement as it did last year, at #50 in the Top 100. BusinessWeek placed Apple's brand value at US$5.55 billion, up 4% from 2002's US$5.32 billion. Microsoft stayed in the #2 position with a global brand value of US$65.17 billion, up 2% from 2002's value of US$64.09 billion.

Dell moved up two places from last year to the #29 slot with a global brand value of US$10.37 billion, up 12% from last year's #31 ranking of US$9.24 billion. Coca-Cola, not surprisingly, has remained the #1 brand since the time of the pharaohs.

It should be noted that Dell's sales are more than six times that of Apple's, though its ranked global brand value is just two times higher.

To see how BusinessWeek determined this value, we turn to its published explanation. The magazine worked with UK advertising firm Interbrand to determine the values using complicated bit of formula. Earlier this year, Interbrand published the results of a survey it conducted that placed Apple as the #2 best-known global brand. That was a survey, and not a ranking system based on dollar value, as this new BusinessWeek article is. For more information on that survey, see our full coverage from February of this year.

The explanation from BusinessWeek on the 2003 ranking system:

To start the process, Interbrand first figures out what the brand's overall sales are. (The brand may be almost the entire company, as in the case of McDonald's Corp. For others, such as Marlboro, it may be just a portion.) Next, with the help of analysts from J.P. Morgan Chase & Co., Citigroup, and Morgan Stanley, Interbrand projects net earnings for the brand. It then deducts a charge for the cost of owning the tangible assets, on the theory that whatever income is generated beyond that cost is due to intangible factors. This is the economic value added by things like patents, customer lists, and, of course, the brand.

The next step is to winnow the earnings generated by the brand from the earnings generated by other intangibles. For example, are people buying Shell gasoline because of the brand name or because the gas station is conveniently located? Interbrand uses market research and interviews with industry executives to sift through those variables.

The final phase is to analyze the strength of the brand to figure out how risky those future brand earnings are. To calculate the brand's strength, Interbrand looks at seven factors, including the brand's market leadership, its stability, and its ability to cross geographic and cultural borders. The risk analysis produces a discount rate that is applied to the brand earnings to come up with a net present value. BusinessWeek and Interbrand believe this figure comes closest to representing the true economic value of that complex array of forces that make up a brand.

There's more eye-glazing explanation on the explanation page. For more information on this year's rankings, check out the full article on the nature of branding in the global market, as well as a sidebar article on the fact that US brands are not suffering from the bout of anti-American sentiments throughout the world. There is also a separate page listing the Top 100 Global brands of 2003.

The Mac Observer Spin:

Apple's brand is one of the things Steve Jobs has often touted, and it's certainly one of Apple's best assets. After allowing that brand to languish for years under poor leadership, we think that Apple seriously began to leverage the brand again starting with the Think Different campaign. Having successfully reestablished that brand, though, today we wish the company would focus a bit less on branding. For instance, Apple could offer some air time to such things as why Mac OS X is a great OS, and how it makes life in the digital age easier, but maybe that's just us.

In the meanwhile, it's interesting to see these brands quantified, and we are even more interested in the fact that Apple's brand value has increased, despite falling market share during the last year. Can Apple leverage that brand to increase that market share going forward? Time will tell.

Brands in an Age of Anti-Americanism