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!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

3 skills you need to drive better collaboration

A study published in The Harvard Business Review found the time spent in collaborative activities at work has increased by over 50 per cent in the past two decades. Larger projects; complicated problems; tighter timeframes: These require bigger teams with specialised skillsets and diverse backgrounds, often dispersed globally.

Jen Jackson

CEO, Everyday Massive

Better the bank you know?

In 2018, only 21 per cent of customers believed that banks in general had their customers best interests at heart and behave ethically. Only 26 per cent believed that banks will keep their promises; views cemented further following the Hayne Financial Services Royal Commission.

Carolyn Pitt

Head of account management, Hulsbosch

What 15 years of emotional intelligence told us about youth media audiences

Taking people on an emotional journey through content is the most critical part of being a publisher. Which is why emotion lies at the heart of VICE Media.

Stephanie Winkler

Head of insights, VICE Asia-Pacific

This journey would identify all your future life aspects!

Maryann Humphrey

Open Colleges: one-to-one journeys is the goal

Read more

It's a pretty good idea. I think this integration is useful. Don't you agree?

Misty Stoll

Officeworks hops on voice interface bandwagon with Google Assistant integration

Read more

ok. so no RCS support? by the way, RCS is a lot bigger than 5G in terms of marketing and monetisation so y'all should be covering it.

DragoCubed

Optus goes for education with 5G network campaign

Read more

Many companies and individual merchants have shifted their major part of marketing to web marketing services Portland as it weighs fewer ...

Radiata Solutions

6 Ways to ramp up Social Media to Your Web Design

Read more

This is a unique experience! Will be interesting to talk to their managers.

Joyce Harris

​How Krispy Kreme revitalised its brand in a saturated market

Read more

Latest Podcast

More podcasts

Sign in