Apple plunges to No. 79 on Forbes innovative companies ranking

Google ranks higher at No. 47, but Microsoft doesn't even make the list

Apple's innovation problems were highlighted today when Forbes published its 2013 list of the world's most innovative companies and ranked Apple at No. 79.

Apple's plummet has been dramatic. In 2011, the first year Forbes issued its Most Innovative Companies list, which ranks 100 firms, Apple earned the No. 5 spot. Last year, the Cupertino, Calif. company dropped 21 positions to No. 26. But the 53-place plunge in 2013 was the biggest decline yet.

Forbes uses a complex algorithm to rank companies by what it calls an "innovation premium," which is the difference between market capitalization and a net present value of cash flows from existing businesses. The innovation premium also takes into account anticipated growth from the existing businesses within a company.

"Think of [the innovation premium] as the investor expectations built into the stock price," explained Bruce Ipbin, managing editor of Forbes, in an interview today. "Apple's ranking dropped because of what happened to the stock [price] in the last year. Its ranking is a proxy of what investors think of the future of the company."

Some companies are excluded from the list, including those in the mining and energy industries -- Forbes said their market values are tied to commodity prices rather than innovation metrics -- banks, which spend very little on research and development, and firms that have fewer than seven years of public financial data.

Facebook, for instance, would have made this year's top 10 if just 2012's financial data was used, but it was eliminated because it didn't meet the seven-year minimum.

At the top of the 2013 list was Salesforce.com, which has held the No. 1 spot for three years running. VMware was No. 3, Chinese search firm Baidu was No. 6, and Amazon.com was No. 7.

Apple rival Google was No. 47 this year, a fall from 2012's No. 24. In 2011, Google had the No. 7 spot.

"It's not necessarily true that Google's innovation has slowed down," said Ipbin, "but maybe investors think that driver-less cars won't pay off like search has."

Apple has collected criticism for nearly a year -- since its stock price peaked in September 2012 at just over $702 -- for what some have called a lack of innovation. That, say analysts, was triggered by the lack of a new product to follow 2007's iPhone and 2010's iPad, both which generate billions in revenue each quarter.

"Apple's already done so much," said Ipbin. "What could they do that would top the iPhone and iPad?"

But because investors -- and customers -- are always eager for something new, something so dynamic that it kick starts an entire industry, Apple's increasingly seen as stuck in the very profitable rut it made for itself.

Some major technology companies have never been on the Forbes list, including Microsoft and Intel, both of which spend a huge amount of money on research and development and have thousands of top engineers working on products, said Ipbin.

Forbes has published a lengthy explanation of its innovation ranking methodology and a supporting FAQ on its website.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about it industry in Computerworld's IT Industry Topic Center.

Join the newsletter!

Error: Please check your email address.
Show Comments

Blog Posts

Maintaining trust in a sceptical world: The power of brand trust

The faith people have in brands creates opportunity for those brands to become trusted advisors. In turn, this builds success by increasing the brand’s profile, letting it broaden its product offering and driving stronger customer loyalty.

Dan Ratner

managing director, uberbrand

When growth stalls: How to boost growth in large organisations

The push to start new businesses continues. In Q1 2017, the number of seed and angel deals increased by 1.4 per cent compared to Q1 2016.

Con Frantzeskos

CEO, Penso

Why we need diversity in marketing

​When we read articles about the need for increased diversity in marketing land, it is often through the lens of gender.

Jodie Sangster

CEO, ADMA

We all know that digital marketing in order to promote a brand, products and services is by the use of electronic media. The evolution of...

Helaina Berry

Predictions: 17 digital marketing trends for 2017

Read more

Interesting insight, well explained and the examples are just apt.Thanks for sharing!

FreshMindIdeas

The politics of branding - Brand science - CMO Australia

Read more

When the world that we live in floods with gigabytes of content every day, we have to learn to be selective about it. Such educational we...

Paulina Cameron

ADMA launches education program to tackle viewability, ad fraud and brand safety

Read more

Hi, i am an Aistralian ALK patient, been on xalkori dec 13 to oct 15 and achieved remission of disease, since been on Ceritinib until no...

gary packer

Pfizer Australia adopts AI-powered digital analyst tool for sales and marketing decision making

Read more

Hi James, shouldn't marketers also be focusing on collecting and utilizing up to date first-party profiling data on customers so that mes...

Tom

3 ways customer data can increase online sales conversion

Read more

Latest Podcast

Getting Intimate with CX Ep 5: Tammy Marshall, founder, The B Hive

How much of customer experience is having the foresight to know what those individuals might like, versus asking them? In Episode 5 of this new podcast series, BrandHook MD, Pip Stocks, talks with Tammy Marshall about the importance of asking your customers questions, how consistency plays a role in engagement, but how the unexpected adds extra value.

More podcasts

Sign in