One more Apple haiku from Colin Gillis

When Gillis covered Apple for BGC Partners, the snarky, 17-syllable poem was his calling card.

The Best Global Brand
According to Interbrand
Is again Apple.

From a note to Chatham Road Partners that landed on my desktop Thursday:

The Big Idea Interbrand published its 2019 Best Global Brands and Apple retained its #1 spot with a brand value of $234 billion and growth of 9% annually. Apple increased its hold on the top spot over #2 ranked Google by growing brand value $19.7 billion year-over-year, widening out the brand value gap between the two companies to over $66 billion. Apple is the only company listed in the report with a brand value over $200 billion. To give perspective on the value of the Apple brand, it is 5x larger than Coca-Cola, the #5 ranked company. Facebook was the top brand decliner in the technology vertical, dropping out of the top 10 to rank #14 in 2019 from #9 in 2018. Given the privacy scandals that Facebook has faced over the last year, the decline is not surprising.

Why It Matters Investors have bid up shares of Apple since a 6-month low of $173.30 on June 3rd, most recently on the expectation of above average demand for the iPhone 11. Apple supplier TSMC just reported its strongest quarterly profit growth in two years, with revenue above the upper range of its guidance. While this is all positive in the near-term, we mention that the share movement highlights that Apple still remains “the iPhone company” despite the heavy push into services. The #1 brand ranking - for 7 consecutive years - also drives home that Apple remains subject to a consumer trends. While the company has been able to leverage its consumer trust into new service revenue, the core business and platform still runs the risk of becoming passe.

My take: "...the core business and platform still runs the risk of becoming passe." There's that old Gillis snark.

7 Comments

  1. Fred Stein said:
    1) Colin, and many other “AAPL iPhone” thinkers don’t get it. The iPhone is paper, a commodity. The value is ‘printed’ on it, just like a newspaper or book. TSMC prints Apple’s designs on their 7nm process. Apple and the AppStore’s millions of App developers, print their SW on the iPhone. Games, music, video streaming, etc. are all printed on the iPhone.

    2) That $234 brand value is not recorded on the balance sheet. Literally Goodwill and Other Intangibles are not listed, at least not on Yahoo finance. As shareholders we ‘own’ it. Plus, the stock market, and many analysts, don’t value Apple’s cash. Again, us shareholders own it, fractionally.

    2
    October 17, 2019
  2. David Emery said:
    Apple analysts
    Come up with lots of bullshit.
    Yet the stock goes up.

    1
    October 18, 2019

Leave a Reply