Any company that can get consumers to camp out overnight while they wait for a new product release should be much admired. You don't move people like that without having a sterling reputation.
Apple (NASDAQ:AAPL) has long been such a company, and the pollsters at Nielsen have recorded the iMaker's rise to the top of the ranks of the most reputable companies in the world.
The Harris Poll each year conducts a public opinion survey of the reputations of the most visible companies, and Apple routinely lands within the top 10 companies with the highest "reputation quotients," or RQ. Scores are based on the public's views of a company in six broad categories:
- Social responsibility
- Emotional appeal
- Products and services
- Vision and leadership
- Financial performance
- Workplace environment
In 2012, Apple was at the top of its game, ranking No. 1 and notching the highest RQ in the history of the survey, which the Harris Poll called "the culmination of 12 straight years of improvement." Since achieving that top rank, though, Apple has fallen further down the list, coming in only ninth place in the just-released 16th annual survey for 2015.
And in the true spirit of competition, let's check out the one company that trumped Apple and earned the highest corporate reputation ranking in the technology industry.
Believe it or not...
Samsung (NASDAQOTH:SSNLF)zoomed up the Harris Poll list to take third place in this year's survey -- making it the highest-scoring technology company on the list. The South Korean handset maker outpaced not only Apple, but also Google (NASDAQ:GOOG) (10th place), Microsoft (15th), and Intel (20th).
How has Samsung done this, you might ask?
Well, consider that Samsung forever invests in its brand in ways that matter to consumers. It doesn't have to be the top-ranked company in everything -- in fact, it ranked among the top five companies in just four of the six categories, without being best in any of them. Ultimately, Samsung's success comes from consistently hitting singles and doubles instead of going for homeruns.
Blotches on its record
Despite this reliable strategy, Samsung's business isn't perfect. The company's profits took a hit in the fourth quarter due to weakness in its information-technology and mobile divisions, though it softened the blow with exceptional strength in display and semiconductors where demand for memory chips used in handsets and other systems remains strong. Those divisions saw revenue rise 4% from the year ago period as operating profit soared 46% year over year.
And the smartphone market remains a battleground for Samsung. As my Foolish colleague Leo Sun recently noted, Apple iOS just topped Google Android in U.S. market share for the first time since 2012, staking out a 47.7% share while Android fell to 47.6% as of December 2014. iOS also was best in Japan and Australia. Samsung, which accounts for about 20% of the Android market all by itself, saw sales of its devices fall 11% to 75.1 million units during the fourth quarter of 2014. That was still ahead of Apple's 74.5 million units sold -- itself an impressive 46% gain over the year-ago figure -- but the race is suddenly a lot closer now and Apple has the momentum.
March madness on the horizon
But don't count Samsung out. The tech giant will launch the newest version of its flagship Galaxy high-end smartphone in March, presumably to be called the S6. That could make up for the excitement that surrounded Apple's iPhone 6 debut last year and powered its results to new levels. Showing it still has technical prowess, too, Samsung just unveiled a three-sided screen it first premiered last year with the Galaxy Note Edge that lets users read the display from an angle.
The company will also build out the middle of its handset portfolio with products such as the A series that is similar Samsung's Galaxy Note 4, but smaller. The challenge, of course, is to break out from the crowded smartphone market in which some 80% of all devices run on the Android platform.
One hand washes the other
The growth and expansion of smartphones is driving Samsung's chip business, and with a solid effort this spring the handset maker ought to regain its footing while maintaining its reputation as a quality tech giant.
Competition against formidable rival Apple will be a constant in the high-end market, and cheaper competitors such as Lenovo and Xiaomi will fill out the midmarket tier. Samsung might be feeling the pressure, as its earnings report attests, but its reputation ranking shows consumers still hold the company in high regard, and that bodes well for a recovery.
Follow Rich Duprey's coverage of all the most important news and developments in the leading brand name products you use. He owns shares of Intel. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Intel. The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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