Last week, Brand Finance came out with its annual listing of brand valuations. In a somewhat shocking finding, the consulting group declared that Apple (NASDAQ:AAPL) had lost its supremacy to Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) subsidiary Google.

Alphabet is a phenomenal company with a long track record of innovation, and the Google brand is extremely powerful. Nevertheless, it still isn't in the same league as Apple's brand in terms of total value.

Is Apple turning sour?

While Brand Finance still rates Apple as the second most valuable brand in the world, it appears to have a fairly negative view of the iPhone maker. According to the recent report:

However, Apple's evangelists are beginning to lose their faith. The snaking queues of early adopters have shrunk almost to the point of invisibility. Apple has failed to maintain its technological advantage and has repeatedly disillusioned its advocates with tweaks when material changes were expected.

Put simply, Apple has over-exploited the goodwill of its customers, it has failed to generate significant revenues from newer products such as the Apple Watch and cannot demonstrate that genuinely innovative technologies desired by consumers are in the pipeline. Its brand has lost its luster and must now compete on an increasingly level playing field not just with traditional rival Samsung (NASDAQOTH:SSNLF), but a slew of Chinese brands such as Huawei and OnePlus in the smartphone market, Apple's key source of profitability.

As a result of this assessment, Brand Finance reduced its estimate of the Apple brand's value by 27% year over year, to $107.1 billion. Meanwhile, it estimated Google's brand value at $109.5 billion, up 24% from $88.2 billion a year ago. Brand Finance cited Google's dominance in search, among other things, to justify the big increase in its brand value.

Consumers are paying more and more for iPhones

Brand Finance's declining opinion of the Apple brand is contradicted by consumers' willingness to pay more and more for iPhones. Last quarter, Apple reported record quarterly iPhone sales of 78.3 million units. Even more impressively, the average selling price (ASP) reached a new record of $695.

The iPhone 7 Plus shown in five different colors

The iPhone's ASP hit a new record last quarter. Image source: Apple.

In the same quarter two years ago, right after Apple released the hugely popular iPhone 6 and iPhone 6 Plus, the iPhone's ASP had surged 8% year over year, to $687. Apple's ability to continue growing that ASP over the past two years, despite facing stiff foreign exchange headwinds in both years, is a testament to the massive value of its brand.

Indeed, the cost of high-quality smartphones is coming down. Leaving aside Samsung, several Chinese manufacturers have become known for designing high-quality smartphones and selling them at near-breakeven prices in recent years. Apple's ability to command a huge price premium over competitors -- which extends beyond smartphones to PCs and (to a lesser extent) tablets -- indicates that its brand is as strong as ever.

Apple is a profit machine

According to Brand Finance, Apple has failed to maintain a technological lead over Samsung and other rivals. In fact, many tech pundits have argued in recent years that Samsung has overtaken Apple in terms of innovation.

Assuming that the two companies are on a relatively even technological footing, they should be able to produce roughly similar earnings. However, that's not even close to being true.

Last quarter, Apple barely retook the lead in terms of smartphone shipments with 78.3 million, compared to 77.5 million shipments for Samsung, according to Strategy Analytics. Yet Samsung's mobile-division operating profit totaled just $2.1 billion for the quarter. By contrast, Apple's operating profit was more than 10 times higher at $23.4 billion.

On a full-year basis -- or looking just at the smartphone business -- Apple's advantage is somewhat smaller. But any way you slice it, Apple generates many times more profit than Samsung. (In its most recent fiscal year, Apple's operating profit was $60 billion, compared to about $10 billion for Samsung's mobile division.)

If Apple doesn't have superior technology relative to Samsung, its brand must be doing most of the heavy lifting to generate $50 billion of additional operating profit on an annual basis. That's more than double Alphabet's total annual operating profit of $23.7 billion.

Google may be a powerful brand. However, it doesn't come close to the value of the Apple brand, which has turned the traditionally low-margin technology hardware business into a long-term cash cow that churns out tens of billions of dollars of profit every year.