Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

Apple Inc. Is an American multinational that designs and markets consumer electronics, computer software and personal computers. Best known for its Macintosh computers and line of iPods, iPhones and iPads, Apple is the text book example of a great brand. Established in 1976, Apple is attributed with popularising the graphical user interface (GUI) that all computers use today. After some ups and downs Apple really hit its stride in 1998 with the release of the iMac and has since gone from strength to strength. Having once been a personal-computer also-ran it is now the world’s second most valuable company selling everything from smartphones to digital music.

Apple’s consumers grow beyond Microsoft’s business

Apple surpassing Microsoft as the most valuable technology company is the latest chapter in a stunning turnaround for Apple and signals an important cultural shift – consumer tastes have overtaken the needs of business as the leading force behind shaping today’s technology.

Microsoft dominated the computer world for 20 years with its Windows and Office software, particularly in the business sector. But now for the first time it would seem Apple’s consumer focused devices and software are the biggest revenue generators. More revenue is now coming from hand-held devices than ever before with smartphone sales growing five times faster than that of PCs. This change is reflected by Apple who earns twice as much revenue from hand-held devices and music than its Macintosh computers.

The consumer is now more important than the business and Apples value reflects this.

New products

New versions of each new Apple products are released to favourable reviews selling incredibly well. The latest iteration of OS X, Lion, has received lots of praise from the industry and the announcement of iCloud, Apple’s cloud computing solution, in June 2011 looks to continue their software success.

Despite some negative publicity with antenna problems Apple can’t make iPhone 4 units fast enough to satisfy demand. At the moment, consumers cannot get enough of Apple products and with the iPad 3 on the way this trend looks to continue. A testament to this is Regent Street’s Apple Store in London as the most profitable retail space in the world, earning an incredible £2,000 a year per square foot.

Apple fanatics show their brand loyalty

Named as the most admired company in the US for the last four years by Fortune magazine, Apple has incredible brand loyalty. It is not unusual for Apple fanatics to travel overseas for the opening of a new Apple store.

Apple brand fanatics were oddly enough never intended or part of a marketing drive by Apple and their occurrence seems to have come as a surprise. One that ever since has been carefully fostered with Apple’s infamous range of ‘I’m a Mac, I’m a PC’ adverts. It certainly seems as if there is a love it or hate it phenomenon with Apple, their current range of ‘trendy’ or ‘smug’ adverts, depending on what side of the fence you sit, demonstrates this well.

Bigger financial reserves than the US government

So successful have Apple been that as of July 2011 they have bigger financial reserves than the US government; $76.4 billion. With this kind of money, assuming they were for sale, they could theoretically buy all their major mobile phone competitors in one go bar Samsung.

Undoubtedly Apple have reached the top, but as the saying goes it’s harder to stay there. It will be interesting to see how Apple can achieve this with the market potentially reaching saturation point and competitors starting to get their handheld devices right it will take clever strategy to maintain their position.

Their current strategy, beyond systematically making small improvements to their current range of products, is to protect their position through the courts.

Court battles

2011 has seen Apple continue to pursue its competitors over copyright infringements. Apple has successfully blocked Samsung’s launch of their Galaxy S tab in Europe and Australia over ‘blatant copying’ and has now filed a complaint with the EU over the design of Motorola’s Xoom. They also continue to go after the unfortunate HTC for its Android use – HTC having allegedly already agreed to pay $5 per device to Microsoft for the use of Google’s smart phone OS.

Apple’s court cases are an unpopular strategy drawing negative publicity to their brand and the technology sector as a whole. Eric Schmidt, Google CEO, summed up how many feel when he said, ‘We have seen an explosion of Android devices entering the market and, because of our successes, competitors are responding with lawsuits as they cannot respond through innovations. I’m not too worried about this.’

Apple could be greener

Apple’s enthusiasm for litigation is not their only criticism, their labour, environmental and business practices often come under fire. Heavily criticised by Greenpeace for its environmental record it scored 4.9/10 in 2010’s Guide to Greener Electronics, well ahead of Microsoft, but several places behind rivals Samsung. Apple has also received negative publicity over its Chinese factories, with claims of sweatshops existing in some of its factories. However since this came to light in 2006 Apple have made many improvements to working conditions.

The future

Apple is in undoubtedly in a great position as the world’s second most valuable brand and the largest tech company. Steve Jobs has done a superb job guiding the country from its lowest point to its current market dominating position. But with Job’s resigning as CEO for medical reasons in August 2011, will Apple be as successful in a future without him?

 

 

Last changed September 5, 2011

League tables

Apple appears in the following brand league tables:

Rank 1 in the Global 500 2012.
Rank 8 in the Global 500 2011.
Rank 8 in the Global 500 2011.
Rank 20 in the Global 500 2010.
Rank 27 in the Global 500 2009.
Rank 24 in the Global 500 2008.
Rank 44 in the Global 250 2007.