Brand value increases across categories

Part 3 | The Categories Technology | Technology
Toy or tool
Technology made life less compartmentalized
and location irrelevant. People
worked and conducted personal business
interchangeably at their job, at home, at
a coffee house, anywhere. This blending
influenced the ongoing transformation of
technology in the workplace.
Initially shaped by business use and
the requirements of corporate IT
departments, the technology category
became increasingly “consumerized.”
People who enjoyed speed and simplicity
in their use of technology at home expected
no less at work. Their impatience with IT
mystique led to a broader acceptance of
BYOD, Bring Your Own Device.
Microsoft introduced Windows 8 to
help consumers integrate their private
and business lives. Some brands, like
Dell, introduced convertible devices
that worked as both laptop and tablet.
A typical business traveler might work
on a laptop, a tool, and then take an
entertainment break to view a movie on a
tablet, using it as a toy.
Apple remains number one
Based on underlying brand strength,
Apple remained the most valuable
technology brand, despite a steep drop
in share price. The stock declined after
Apple fumbled the introduction of iPhone
5. The replacement of Google Maps with
a troubled Apple version ignited investor
concern that the brand’s capacity for
creative design and smooth execution
ended with the death of founder Steve Jobs.
Google benefited from that skepticism.
As Apple stock fell, Google stock rose to
record highs. The share price appreciated
based on the performance of Google’s
multiple businesses including: ad revenue
from online search, the market dominance
of its Android operating system for mobile
devices, and the ubiquity of Gmail.
The increase also reflected confidence in
Google’s potential to enter and quickly
assume leadership in other technology
businesses. With a 5 percent hike in brand
value, Google became the second most
valuable global brand across all categories,
after Apple and just above IBM.
102 BrandZ Top 100 Most Valuable Global Brands 2013
Apple’s weakness also helped Samsung,
although Samsung also helped itself.
Samsung’s brand value rose sharply
primarily because of its Galaxy
smartphone. Consumers responded well
to the product experience and also to
commercials that positioned the device
as the choice of the young and hip, while
poking fun at Apple iPhone as the brand
choice of the parents.
Competing ecosystems
Apple’s future depends on more than
who makes the best devices, however. The
consumer brand universe is divided into
two groups: those that produce products
and services; and those whose products
and services exist as part of the brand’s
platform or ecosystem.
This second group of brands includes
Apple and Google along with Amazon,
Facebook and Microsoft. Each brand
represents an ecosystem of branded
devices, an operating system, and content.
Amazon, for example, sells the Kindle,
but the device is part of the larger
ecosystem that includes content in the
form of e-books, music, movies, and a
repository of product information and
customer opinions stored in the Amazon
Cloud. (Because Amazon derives most of
its revenue from e-commerce, the brand is
listed in the retail category ranking.)
Facebook Home, introduced in March
2013, is actually software that fits over
an Android platform, preempting other
apps. Phones loaded with the software
open to the Facebook newsfeed. Although
Facebook Home isn’t a device, it acts like
one, making all of Facebook’s content
instantly mobile, not even a click away.
A fundamental distinction regarding
ecosystems is whether a system is open—
generally accepting of applications from
other brands—or closed. Part of the skepticism
surrounding Apple was the notion
that its closed system advantage—quality
control and consistent performance—
erodes as devices reach rough parity in
quality and reliability. That formulation,
however, discounts the intangible hold
that Apple may have on adherents drawn
to its combination of product innovation,
design leadership and retail presence—to
the overall Apple brand experience.
Insight
Expect more regulation
The technology category is moving
toward saturation, and successful
companies have to be useful to
consumers without being intrusive
or irritating. At the same time, similar
to the way the US government
intervened after companies became
rich during the Gilded Age, we’ll
see more regulatory and political
concern around these rather large
organizations.
Andrew Curry
Director
The Futures Company
Andrew.Curry@thefuturescompany.com
Chinese brands shift, too
The value of technology brands
fluctuated in China as well. In contrast
to the decline of Facebook’s brand value,
the band value of its Chinese equivalent,
Tencent rose 52 percent, making it one
of the Top 10 Risers in the BrandZ Top
100 Most Valuable Global Brands.
Tencent reports almost 800 million active
users of its qq instant messaging service
in China. But the brand value increase
was in part driven by excitement around
WeChat, which enables users to send both
voice and text messages from the mobile
devices over the Internet, avoiding SMS
charges, similar to WhatsApp.
In contrast to Tencent’s brand value
appreciation, Baidu declined in value 16
percent. China’s dominant search engine,
with an estimated 75 percent market
share, invested to position the brand
for the transition from PC to mobile.
The investment lowered earnings and
impacted the share price.
Based on
underlying brand
strength, Apple
remained the
most valuable
technology brand,
despite a steep drop
in share price after
Apple fumbled the
introduction of
iPhone 5
Insight
Blending is a key trend
We had fixed day parts to our lives.
At breakfast we’d consume media as
a consumer. At work we’d consume
media as a businessperson.
At lunch we’d be a human being
and eat and run errands. There’s
been a blending of being a
consumer and businessperson.
Brands need to facilitate blending,
not present barriers.
Spencer Osborn
Worldwide Managing Director
Global Brand Management
Ogilvy & Mather
spencer.osborn@ogilvy.com
Technology
Business
SOME BRANDS RISE
ON CLOUD, BIG DATA
Others pulled by gravity of change
CONVERGENCE AGAIN influenced
the fate of technology brands—but in a
different way.
The need to analyze enormous amounts
of information to drive business
transformation converged with growing
corporate willingness to make IT
investments deferred during the recession.
Ready with pricing approaches they
had devised to cope with the economic
slowdown, brands improved the
affordability of their products and services
by offering more flexible, incremental, or
subscription options.
Some brands quickly discovered
opportunities in the rapid shift in data
storage from on-location to the cloud,
while other brands faced intensified
challenges. Innovation remained key to
brand success.
Faster data analysis
SAP experienced a 34 percent rise in
brand value and an increase of almost
30 percent in its average share price. The
performance coincided with SAP’s shift
in focus from helping customers become
more efficient to helping them transform.
The change was most evident in SAP’s
in-memory offering, which it calls HANA.
In-memory computing makes access to
data stored in diverse corporate siloes
more instantaneously available to more
people. For example, it enables a sales
person to interact with a customer while
checking a tablet for the individual’s
purchase history and the company’s
inventory levels. This technology can
improve not only business efficiency, but
also customer experience.
Oracle offered a version of in-memory
computing called Exalytics. The company
was one of the early pioneers in business
data analysis thirty years ago when it introduced
relational databases. Relational
databases organize data into tables that
the user can combine in various ways depending
on business function. Oracle remains
a powerhouse in its core business,
but faced mounting competition from
younger companies that claimed to be
faster and cheaper at organizing big data.
Slower European sales
Siemens experienced a challenging year
financially because of the economic
slowdown in Europe, a key market. Late
in 2012, it announced a companywide
program of cost control, organizational
simplification and other measures
expected to move Siemens forward
effectively over the next few years.
Siemens divides its business into four
sectors: healthcare; industry; energy; and
infrastructure and cities.
Siemens experienced a well-publicized
success for a business it calls Vertical
IT, which is the technology that enables
intelligent machines to interact with
each other; to have a series of assembly
lines coordinate for maximum efficiency,
for example.
The Mars Rover, which landed on Mars
in July 2012, was built based on a virtual
model designed and tested using Siemens
Vertical IT software. Siemens’ brand
value improved 16 percent.
Adjusting for growth
IBM’s 2012 revenue from its SmartCloud,
which is aimed at business clients,
increased 80 percent, amid suggestions
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