This cool infographic was brought to my attention, today, on Twitter thanks to a tweet from Paul Worthington, the head of strategy for Wolff Olins New York.
I thought to myself, this is a great example of how strong brands = increased margins. Apple may only represent 8% of the total estimated revenue for the mobile phone industry, but it earns 32% of the total estimated profits! This is huge - Apple earns a 40% margin whereas Motorola loses 21%. In fact, the Apple iPhone is estimated to earn approximately $600M+ in profits relative to each of the other brands mentioned in this infographic - not bad for representing only 8% of the total market's revenue.
Apple's dedication to its brand purpose has focused the organization's efforts on creating exceptional user experiences through innovative design. This has caused Apple's share price to increase approximately 1,000% over the past 10 years. Not only that, Apple's brand value ($13.7 billion in 2008 according to Interbrand) represents about 66% of its market capitalization, as mentioned in Marty Neumeier's book The Designful Company. This is rather impressive when compared to Microsoft, who has a brand value of $59 billion, which represents only about 17% of its market cap. This indicates that Apple has higher customer confidence, loyalty & willingness to repurchase; therefore, it's cheaper for Apple to keep customers since they trust and believe in the brand.
I feel it is this loyalty and trust for the Apple brand that has contributed to the success of the iPhone. Apple's higher margins indicate its customer's willingness to pay for the brand, even though the product isn't significantly better than the competition.
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