World’s most valuable brands by Forbes

Google closing the gap with Microsoft on Forbes brand ranking
Google closing the gap with Microsoft on Forbes brand ranking

Forbes has listed the most valuable brand names in the world, and the top three spots went to the three largest tech companies in the world.

The magazine said when it comes to charging a premium price and moving product, no one does it better than Apple. There are other phones and tablets that are functionally comparable or arguably better than the iPhone and iPad, but the Apple brand carries tremendous weight and credibility, and customers are willing to pay up for that. The company sold 39.3 million iPhones in its latest quarter and could sell as many as 60 million during the last three months of 2014 with the holiday selling season. Apple also moved 12.3 million iPads and 5.5 million Macs last quarter.

Add it all up and the Apple brand is worth $124.2 billion and almost twice as much as any other brand in Forbes’ annual study of the world’s most valuable brands. The value of the Apple brand is up 19% over last year. Apple’s strong brand and innovative products allowed it to redefine four industry categories over the past 13 years with the launches of the iPhone, iPad, iPod and iTunes. The next industries on Apple’s hit list are smarthwatches with the Watch and financial payments with Apple Pay. Premium pricing pushes up Apple’s operating profit margins to 33%, and the company generated $50 billion in free cash flow for the fiscal year ended in September.

Microsoft inked a five-year, $400 million with the NFL last year. The pact includes Surface tablet computers on the sideline in 2014 that download high-def photographs of plays as they occur. Microsoft has witnessed the power of the Apple brand with the sponsorship, as announcers and players repeatedly refer to the Surface tablets as iPads and one player called them “knockoff iPads.” Microsoft is still a bit player in tablets and phones. “There is a lot of catching up to do,” says Reibstein. “They are going to have to work to overcome the brand disadvantage they have in those areas.”

Google climbed two spots to No. 3 among the top brands with a value of $56.6 billion, up 19%. Google is the generic term for the search category, but what separates Google from brands like Kleenex and Xerox is the amount of money it generates from its ad-driven business. The Google brand generated $16 billion in earnings before interest and taxes over the last 12 months, and it is one of the biggest ad spenders in tech at $2.8 billion in 2013. “With a well known brand, people trust it a lot more, and part of what is happening with Google is a matter of trust,” says Reibstein.

Click here for the full list on Forbes