Apple retains the world’s most valuable brand title, per Kantar BrandZ Rankings, valued at $880,455M. This figure is down 7% from 2022, despite the value of the top 100 as a whole being down 20%. This evaluation is also up from $352,206M in 2020, and $300,595M in 2018.
Apple has proven resilient in the face of testing market conditions, justifying premium prices with positive perceptions, and proving that meaningful, different, and salient brands are best positioned to weather global economic disruption.
So how did Apple withstand the economic downturn of the last year?
While iPhone sales still comprise a majority of Apple’s total yearly sales revenue, its services now account for a fifth of this figure, and command higher profit margins than the company’s hardware business. By the end of 2022, Apple had 935 million subscribers across all its services, which includes iCloud, Apple Music, Apple TV+, Apple Arcade, Apple News+, Apple Fitness+, Apple One, and Apple Pay.
In 2022, we saw Apple launch an updated version of the iPhone, Apple Watch, Air Pods Pro, a new iPad, Mac Studio, and MacBook series with the updated M2 silicon, among other updates. During the first half of 2023, the company has already refreshed its line of Macs, a new HomePod and then in June, alongside three new Macs and a slew of OS (Operating System) updates and launched its much-awaited AR/VR headset – Vision Pro, introducing yet another new product in its innovative lineup.
Leading consumer technology
Apple, ranking first in Consumer Technology and Service Platforms, accounted for over 80% of the category’s top 10 total brand value, $1,078,324M. This renamed category has expanded from five to 10 brands, and better encompasses the way that consumer-facing tech companies have pivoted to offering branded services alongside physical devices like smartphones, televisions, and gaming consoles.
One of the biggest stories this year has been the slowdown in smartphone sales. Apple iPhone sales were faced with supply chain disruptions, as factory lockdowns and part shortages impacted the brand’s ability to deliver iPhone Pro models to stores within its key Chinese market. Like all the top brands in this category, Apple lost brand value over the past year, declining 7%. But that represents a smaller decline than what was seen for all but one returning brand within this category, the outlier being Huawei.
Apple’s success as a brand ensured that its 2023 valuation was not lower. True to Kantar’s model of brand value, Apple’s still-excellent brand equity has helped it to navigate unprecedented disruptions with its customer base and premium positioning intact.
Apple’s brand equity is built on differentiation
An analysis of Kantar’s BrandZ data using Kantar’s BrandSnapshot platform on Kantar Marketplace, demonstrates that Apple stands head and shoulders above all other brands in being ‘Different’, the extent to which brands offers something that others do not and lead the way at an Index of 170 above the category average of 100. It is by no means a slouch on being ‘Meaningful’, the extent to which brands build a clear and consistent emotional connection and deliver against consumer needs, but Apple lags Samsung and Amazon by this measure, likely because these brands offer products and services across a greater spectrum of consumer needs.
So, you may well ask what drives Apple’s highly ‘Different’ position in the market. Kantar North America’s Industry Executive for Technology and Health, Subhashish Dasgupta, said, “The three areas that most define Apple’s leading position, as per BrandZ, are purpose, distinctive and great advertising. Apple has repeatedly delivered successful new products to the market, changing the shape and trajectory of the consumer electronics industry over several decades.”
Apple Inc has led the industry through its purpose and championing the initiatives the organization strongly believes in such as consumer privacy, supporting inclusion and diversity, racial equality and justice, supporting climate change by being more environmentally conscious through the reduction of plastic in packaging, and accessibility in its products features and supporting education initiatives.
Apple’s products continue to be distinctive in design and features. Whether it’s the ubiquitous white earbuds of the Air Pods or the distinctive design of its computing hardware, the latest radical design of Vision Pro or the iconic design of Apple Stores, you can't mistake an Apple product, service or store when you see it and consumers undoubtedly use Apple products as a way to make a statement about their identity and personality.
Apple’s advertising has been iconic from the legendary 1984 Superbowl Commercial to its funny Mac vs PC advertising. Apple has been consistently producing ads that have captured consumer interest on TV and Digital. Last week Apple released the Crash Test ad , which had already seen over 2.6M views on YouTube (as of the time of writing this article). Kantar put this ad through its proprietary AI-powered ad testing platform – LinkAI – and this ad evoked a strong element of surprise and ranked in the top 15 percentile of all ads in North America on Enjoyment, Involvement and Brand Appeal – indicating that it would be another memorable ad from Apple.
The price of an Apple lifestyle
Being Meaningful and Different drives pricing power, and Apple’s price point is always seen as justified. Through high rates of inflation, consumers are making changes to their habits, yet with their incredible consumer loyalty, enhanced customer relationships, simple purchasing process, and added value through special editions, Apple needs to be mindful of balancing a strong distribution advantage with preserving exclusivity. Brands with the strongest pricing power have a +4% advantage, per Kantar BrandZ. This price differentiation allows Apple to deliver on a range of consumer needs while still being considered a premium brand. Also, brands that justify their pricing, at the expense of losing volume share (demand power), have seen the greatest increase in brand value.
Same as last year, Apple created an ecosystem built on premium pricing and engrained their products into consumers’ lives. Playing a role in everything from when you are checking your watch, to how you communicate at work or with family, taking pictures, and watching TV and sports, Apple clearly delivered on their brand promises and earned their way to being the most valued brand in the world.
Kantar BrandZ does find that as the leading brand in the world, Apple could do more in its sustainability efforts. Half of the most valuable global brands lack sustainability credentials, a huge opportunity for most brands. Sustainability takes into account responsibility to the environment, society, employees and supply chain.
Relative to other categories, more of the value of top business solutions and service platform brands is driven by sustainable perceptions. This makes sense, as clients often turn to business service partners for help on sustainability imperatives like reducing overall carbon footprint, for example carbon-neutral cloud computing. In the past 10 years, consumer endorsements of sustainability perceptions have risen 84%, and contributed roughing 6% of a company’s brand equity.
With sustainability being a growing and important lever to drive both volume share and justify pricing, Apple can consider if sustainability merits an even higher profile within the organization, even though the overall importance of sustainability to consumer brand decision-making currently is small, contributing an overall average of 6%. If anybody can change this, Apple can!
Overall, Apple maintained a comfortable lead over the rest of the top 100, as the world’s number 1 most valuable brand, and had an extraordinarily strong performance year relative to expectations and the market. Apple continues to justify their pricing power, and brands that have grown in Pricing Power increased brand value at 2X the rate of those that declined in Pricing Power. Despite growing pressure on budgets, consumers are still saying they prefer to choose brands rather than opt for the cheapest. Being Meaningful and Different drives Pricing Power and half of the most valuable brands have strong Pricing Power.
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