Brand Lesson 2021 or The Probably Most Valuable Letter in The World

Brand Lesson 2021 or The Probably Most Valuable Letter in The World

24/12/2021

By Michael Brandtner, Ries Global

In October of this year, Interbrand presented the most valuable global brands of the world, as it has done every year since 2001. Apple was the first brand in the world to exceed the 400 billion U.S. dollar mark and clearly leads this ranking with 408.3 billion, followed by Amazon with 249.2, Microsoft with 210.2, Google with 196.8 and Samsung with 74.6 U.S. dollar. At the same time, Apple’s iPod also celebrated its 20th anniversary this year.

From crisis candidate …

In 2001, Apple’s future did not look at all rosy. At that time, it was only 49th in the above-mentioned brand ranking with a brand value of 5.46 billion U.S. dollars. Back then Apple was also clearly overshadowed in terms of brand value by other technology brands such as Microsoft, IBM, GE, Nokia, Intel, HP, Cisco, Sony, Compaq, Oracle, Kodak, Nintendo, Dell, Ericsson, Canon, Samsung, SAP and Xerox.

In addition, this ranking, which premiered at the time in BusinessWeek on Aug. 6, 2001, before the iPod was unveiled in October, said, “Apple continues to churn out eye-pleasing products but struggles to find takers beyond the core Mac faithful.” This already read very flattering for Apple compared to the BusinessWeek front page of February 5, 1996, when it said about Apple: “The Fall of An American Icon”. But it also means that in 25 years, Apple has transformed itself from a crisis candidate to a role model company.

… to the role model company

In such a crisis situation, most companies would probably have intuitively opted for a classic three-fold offensive: They would have launched a product, advertising and price offensive at the same time to force the turnaround of the brand. Steve Jobs took a completely different approach. In 2001, he focused all his energies on the iPod, the first MP3 player with a hard disc and the brilliant slogan “1000 songs in your pocket”.

In doing so, he not only created a new basis for Apple’s success, he also relied on a new brand mode. It was the beginning of the age of “i” innovations for Apple. He launched not an Apple MP3 player, an Apple smartphone and an Apple tablet, but the iPod, iPhone and iPad. While Apple was only 49th in 2001, as mentioned above, by 2007, when the iPhone was presented, they had already moved up to 33rd place with a brand value of 11.04 billion U.S. dollar. In 2010, when the iPad was presented, Apple was already in 17th place in this ranking with a value of 21.14 and in 2013 finally replaced the long-term leader Coca-Cola at the top. (At that time, Apple’s brand value was 98.32 billion U.S. dollar).

The true “i” value

It is not for nothing that Steve Jobs was declared “iGod” during his lifetime as a result of the success of these “i” innovations. This brings us to an extremely important point from a brand perspective. Because by naming the products in this way, he not only created three new innovations, he de facto built three new brands. This can be seen very clearly from two perspectives:

(1) The “word of mouth” perspective: No one would walk into an Apple store or Media-Markt today and ask for an Apple smartphone, an Apple tablet, or an Apple MP3 player. Instead, the iPhone, iPad and iPod brands have clearly established themselves in perception and linguistic usage. As a result, these products also have a stronger and more independent position mentally than the Apple Watch, for example. This is because, mentally spoken, it is always only a watch by Apple, because it does not have its own name like iPhone.

(2) The “potential brand sales” perspective: But it gets even more exciting if you were to evaluate the whole thing from the perspective of a potential brand sale. How much money would someone spend on the “names” Phone, Tablet, MP3 Player or Watch? Answer: “Zero, because those are generic terms that anyone can use.” It would be quite different for iPad, iPod, but especially for iPhone. Here, Steve Jobs created real brand added value.

AWS, Azure and Google Cloud

The current branding strategies of Amazon, Google and Microsoft in the cloud business are also interesting in this context. Amazon’s brand name for the cloud business is Amazon AWS, Microsoft’s is Azure, and Google’s is simply Google Cloud. From a brand perspective, Amazon and above all Microsoft are clearly pursuing a better strategy than Google, as both rely on real brand names, while Google only uses the generic term “cloud”.

So in the end it makes a big difference whether you just build up a new business field or a new business field with a new brand. Once Google wants to separate itself from the cloud business field, it can only sell the business. If Microsoft or Amazon wants to separate from it, they could sell the business and the Azure brand or the AWS brand. And that could make a very, very, very big difference financially. Conclusion or brand lesson 2021: Don’t just be innovative, but also give key innovations or new key business areas a real new name, where even a small “i” can turn the generic term Phone into a powerful brand iPhone.