Amazon beats Apple and Google to be named ‘most valuable’ brand

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Amazon beats Apple and Google to be named 'most valuable' brand
Jeff Bezos has a reason to look happy.
Photo: Steve Jurvetson/Flickr CC

Amazon has pipped Apple and Google to the no. 1 spot in this year’s Brand Finance Global 500 ranking.

The somewhat unorthodox ranking system looks at the world’s 500 most valuable brands across all sectors and countries. It then assigns a “brand value” based on a royalty rate that companies could get for licensing their name in the open market.

Brand Finance compiles its annual list by estimating the royalty rate that would be charged to use a company’s brand. This takes into account current and expected future revenue. It’s a fairly complex methodology that’s explained in more detail here.

As the firm explains:

“Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.”

It can also be a bit of a head-scratcher because, while the top companies typically conform approximately to their real life market cap, this relationship isn’t exact. This year, Amazon became the first company in the Global 500 ranking to break the $200 billion brand value mark. Brand Finance values Amazon at $220.8 billion. That’s more than $60 billion more than Google in second place. And $80 billion more than Apple.

global_500_most_valuable_brands_social_media_card
How the top brands stacked up.
Photo: Brand Finance

Amazon pips Apple to be named most valuable brand

In the real world, at time of writing Apple has a market cap of $1.4 trillion. Google parent company Alphabet has a market cap of $1 trillion. Amazon has a market cap of $921 billion. I’d also question whether Amazon, as renowned as it is, would have a more alluring brand than Apple. Amazon is known for lots of things: convenience, affordability, innovation. But I’m not sure Amazon is a valuable brand synonymous with luxury in the way that Apple is.

Also interesting to note is that Apple had the biggest decline in value of any company in the top 10. That’s despite having just enjoyed arguably its greatest year in history.

Cult of Mac reached out to Richard Haigh, MD of Brand Finance for clarification on Apple’s position. “Apple’s latest announcement of bumper Christmas sales shows the brand still has some tricks up its sleeve,” Haigh told us. He continued that:

“There are challenges ahead for the brand, as sales in the first part of 2019 demonstrated. In addition, the company has made slow progress to diversify outside of the iPhone, something reflected in the drop in its brand value this year of 9%. The latest announcement will help to keep the brand moving forward as it faces higher competition, difficulties entering the Chinese market, and changes in consumer behavior meaning a two-year phone cycle rather than the one-year ‘planned obsolescence’ the brand previously employed.

Ten years ago, Apple stood alone as an exalted brand, now it must fight to maintain its position at the top of a competitive market. The announced growth in wearables and Services show the brand has the ability to remain the example for others to follow.”

You can check out the rest of the rankings here.