The Intangible Asset Finance Society’s Mission Intangible blog has an article that converts the top of Barron’s “world’s most respected companies” list (as voted by U.S. money managers) to their Reputation metric. Recall we have looked at Reputation as intangible property, and Mission Intangible sets about proving how it affects value.
This year, no surprise, Apple reigns supreme, followed by Amazon.com, Berkshire Hathaway and IBM.
Here’s the full list.
Mission Intangible goes one step further, singling out Nokia (as the world’s largest telephone handset manufacturer, and not on the list) and comparing it Apple. “While the most respected company in the world only commands 4% of the telephone handset market, it commands 50% of the profits,” citing pricing power as one of the key benefits of Apple’s superior reputation. The comparison is startling.
The Economist takes it one step further, suggesting it is not just Nokia that lacks respect, it’s the entire mobile phone industry in Europe! Nokia, however, is the largest, and clearly its lack of respect, the reputation shortfall, affects the industry metric.
Again, according to the Economist, Stephen Elop, Nokia’s new CEO, sounded the Clarion call to all 130,000+ employees, stating in a company-wide memorandum, “We are standing on a burning [oil] platform,” suggesting they had no choice but to leap into the “icy waters” below.
And what were those icy waters? At a financial briefing on February 11, we found out (what many suspected). Nokia is welcoming Microsoft (number 22 on Barron’s list) as a partner. There is some fall-out. One blogger, for example, suggests Mr. Elop may be a Trojan horse for Redmond.
More than a couple current partners aren’t happy. Some analysts think it’s a case of too little, too late.
However, affecting a turnaround is not easy. Whenever radical change is made, it is going to affect some adversely. The problem most analysts point to is Windows Phone 7 is currently losing the market share battle with Apple and Android. Every day the gap grows larger. Delays that are (of necessity) built into this partnership will give the leading two operating systems too much of a head start.
If Reputation is, indeed, a key metric, Nokia had to do something. Investors appear to think teaming up with Windows makes sense and started pushing the lagging Nokia stock price upward as soon as the partnership rumors surfaced. It will take the rest of the year to see what the partnership can create, at least in terms of product. The marketing muscle of Microsoft, especially in the U.S., where Nokia’s share languishes, could add significantly to Nokia’s “respect” even before new product hits the shelves.
We’re betting the reputation of Nokia has hit its low point, and that its CEO’s aggressive turn to Microsoft will pay off, but it is not likely to threaten Apple and Android any time soon.