Google knocks Apple off the top spot to become the world’s most valuable brand

Google has surpassed Apple to be crowned the most valuable brand in Millward Brown’s BrandZ Top 100 ranking for 2016, valued at $229bn following 32% growth year-on-year.

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Apple is now the second most valuable brand at $228bn despite an 8% drop in brand value compared to 2015. The fall is in stark contrast to last year when the iPhone maker’s value grew a staggering 67%, adding nearly $100bn to its worth.

There is now a value difference of just 0.3% between the two companies, the closest margin since the study began.

It’s no surprise that Google and Apple continue to fight it out for the top spot given technology is the most valuable category in the ranking, with a combined worth of $1,106bn, nearly three times more than when the ranking began in 2006.

Scroll down to see brands ranked 11 to 100.

Google and Apple continue to battle it out

Google has made a number of strategic moves to add clarity to its business and strengthen its reputation as a technological innovator over the past 12 months, which have contributed to its growth.

Last August the business unveiled Alphabet, its newly formed parent company, reinforcing its evolution from search engine to technology behemoth. The move allowed Google to separate its operations, including the search business, YouTube and Android, from other areas of the organisation such as ad tech for marketers, flying drones and developing driverless cars.

Emphasising this transition, Google used its annual I/O developer conference last month to lay out how it will move beyond the smartphone into artificial intelligence, messaging and virtual reality.

Apple, meanwhile had a break from big product launches last year, which is perhaps reflected in its second quarter results for 2016. Overall revenue was down 12.8% to $50.6bn compared to the $58bn it made in the same quarter last year.

The company also experienced its first ever drop in year-on-year iPhone sales with 51.2 million sold in during the second quarter of 2016 compared to 61.2 million during the same quarter in 2015. There are rumours that Apple will launch the iPhone 7 this year, two years after it unveiled the iPhone 6 and 6s, which will likely give the brand a boost.

Global growth slows

While there are some big winners it’s important to note that the past 12 months have been challenging for many of the brands listed, as the global economy slows.

The combined brand 
value of the BrandZ 
top 100 grew 3% this year, compared to 14% in 2015. Combined value now stands at $3.4trn, up from $3.3trn last year.

lucy brandz12It’s a different story when looking at the top 10 brands alone, however, which have an annual growth rate of 10%. The value of brands ranked 51 to 60, meanwhile, has fallen 6% and the collective worth of brands in positions 91 to 100 has dropped 3%. Looking from 2006 to now, the top 100 global brands have achieved an annual growth rate of 133%, but the top 10 have grown by 207%.

READ MORE: Facebook, Starbucks and Amazon are the fastest risers in this year’s BrandZ ranking

Brands in the top 10 tend to grow much faster than brands lower down the ranking as Walshe claims that “big is beautiful” for consumers, as larger brands are more prominent in consumers’ minds and are “hard to dislodge”.

He says: “These powerful brands are staking their place because of what they stand for, and as long as that is meaningfully different they have a huge commercial advantage.”

But strong brands are not immune from innovation and Walshe advises smaller brands not to “give up just because somebody dominates a category” and to “have a go and be different”.

He cites IBM as an example. It slips six places this year to 10th place after experiencing an 8% decrease in value compared to 2015. Walshe puts this down to the competitiveness of the software market and the transition to cloud, something that Microsoft has arguably been more successful at.

He says: “You have major competitors like Oracle and SAP squeezing IBM. There is a theme of [big established] brands being attacked, for example Visa, which has done well but it’s under severe attack from brands like PayPal.”

IBM comes second in BrandZ’s ranking of B2B brands, a new list for 2016.

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Methodology

Millward Brown’s BrandZ valuation process takes the financial value created by a brand in US dollars and multiplies it by the proportion of that value generated by the brand contribution alone.

That brand contribution is derived from consumer research that quantifies how much of the volume people purchase and how much of the price premium people pay can be attributed to brand equity, connecting what people think to what they do.

The study is based on interviews with 170,000 consumers each year, amounting to over 3 million since the ranking was first published in 2006. It looks at 14 categories across different markets and builds a brand equity score from the brand’s ability to be meaningful, different and salient.

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