Want to see the full list of 100 top tech companies, according to Brand Finance? Then the company's detailed 19-page PDF report has all the details you need to see, here.
We can start off with Amazon, however, with Brand Finance listing the company as "the world’s most valuable tech brand, with its value surging by 42% to US$150.8 billion".
Apple, up 37% to US$146.3 billion, "has retained second place, while Google, up 10% to US$120.9 billion, has fallen to third place as both Amazon and Apple’s brand value have accelerated ahead".
Brand Finance tells us that "the huge growth in the brand value of Amazon comes from using technological expertise to expand into many new areas across the broader tech sector, including smart speakers, home entertainment, Internet hosting, home automation, music, mobile devices, audio books, live streaming, artificial intelligence, and home security".
"Amazon has built a brand that has no peer, because they provide unmatched convenience, availability, and scale. Their brand is unconcerned with competitors. Instead, it is concerned with removing every possible impediment to customers using their services.”
So, what does Brand Finance have to say about Amazon’s expansive growth leaving "Apple and Google behind"?
We're told that although "Apple defended 2nd place in the ranking, with brand value rebounding to US$146.3 billion after the 27%-decline last year, its future looks challenging".
"Apple has failed to diversify and grown over-dependent on sales of its flagship iPhones, responsible for two thirds of revenue. Sales of iPhone X have fallen short of expectations, and the model is predicted to be discontinued later this year. With the advent of emerging world brands like Huawei, Apple’s increasing focus on what are effectively luxury products may cost the brand a fair share of the global mass market, limiting the potential for brand value growth".
Then there's Google, about which we're informed that it has "dropped from 1st to 3rd position, recording a relatively slow brand value growth of 10% to US$120.9 billion. Google’s online ads generated more traffic than expected in 2017 as aggregated paid clicks rose by 43% year on year, boosting revenues. However, presenting a solid performance is not always enough".
"Google is a champion in Internet search, cloud and mobile OS technology but, similarly to Apple, its focus on particular sectors is holding it back from unleashing the full potential of its brand. Google’s investments in self-driving cars and handsets still lack the scale and audacity demonstrated by Amazon’s new ventures. Nevertheless, the acquisition of 2000 HTC smartphone staffers for US$1.1 billion is a boost for plans to expand in hardware".
So, what about those Chinese brands like Alibaba, Tencent and Huawei? Brand Finance tells us they're all surging in value.
"Further down the top 10, the trio of Chinese brands — Alibaba (7th, up 58% to US$54.9 billion), Tencent (8th, up 83% to US$40.8 billion) and Huawei (9th, up 51% to US$38.0 billion) — all posted extraordinary jumps in brand value, moving up the tech brand value ladder. Benefitting from dominance in the domestic Chinese market, they have built a strong foundation for global growth.
"Alibaba shows no sign of slowing as it plans to invest US$15.2 billion towards its global logistics chain expansion. Also growing quickly, Tencent’s WeChat app and gateway now has over 800 million users, as it has become essential for communication in China. It has leveraged its brand to develop an extraordinary level of vertical product integration, providing a range of complementary services that would require dozens of specialised apps to deliver in Western countries.
"The phenomenal global rise by Huawei continues with its smartphone business now firmly in third place behind Apple and Samsung. The core networking business, which delivers the bulk of Huawei’s global revenue, is growing with the expectation of 5G services coming online soon. Since 2012, Huawei has grown nearly 700% from US$4.8 billion to US$38.0 billion, trailblazing Chinese efforts to build home-grown brands with global reach. Desktop-focused brands lose out".
And what about some of the other top ten players?
Well, we see that "Microsoft (up 6% to US$81.2 billion) and IBM (down 10% to US$32.5 billion) are most closely associated with non-mobile services. Microsoft’s brand is linked to its Windows operating system and Office software primarily used on desktop devices, and IBM to its corporate computer services.
"While both brands certainly do offer mobile services, they do not yet have the same brand equity in this sector as Amazon, Apple, and Google, and are losing out on the brand value gain that it offers."
And Samsung? Where does this tech titan sit? We're told it "becomes tech sector’s strongest brand".
Brand Finance says that in addition to measuring brand value, the company's Tech 100 report "also analyses brand strength, which indicates what proportion of a business’s revenue is contributed by the brand itself. Samsung (up 51% to US$77.7 billion) jumped several places this year to become the tech sector’s strongest brand with a Brand Strength Index (BSI) of 93.0, an increase from 87.4 in 2017".
The full report can be downloaded here.
Here's Brand Finance's Methodology:
Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines 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.
Brand Strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.
Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
- Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
- Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
- Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
- Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
- Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
- Apply the royalty rate to the forecast revenues to derive brand revenues.
- Brand revenues are discounted post-tax to a net present value which equals the brand value.