Tech sector hit hard by crunch

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The credit crunch-powered global recession has led to a significant drop in value across the technology sector - although IBM appears to be (just about) bucking the trend.

In March, Brand Finance plc, the world’s leading independent brand valuation consultancy, released the 2008 version of its report on the 500 most valuable Global Brands. The effective valuation date was 31 December 2007, using financial forecasts for 2008 and beyond. Since January, the US economy has been hit by commodity price rises, the credit crunch, rising unemployment and tumbling share prices. As a result of this global economic crisis, Brand Finance revisited its findings and has updated the values of the top 100 global and top 100 US brands.

The updated report reveals that since Brand Finance’s previous valuation the Microsoft brand has dropped 12 percent to US$39,358 million. Google’s brand value also fell significantly by 12 percent. Cisco System was hardest hit, dropping from two places in the brand values ranking and losing 15 percent off its brand value. Hewlett-Packard retained its number eight spot in the values ranking but fell 5 percent to US$32,427 million.

Given the drop in value of technology brands, a fall of 1 percent for IBM, to US$37,948 million, represents a robust performance.

“The significant drop could be symptomatic of individuals and businesses delaying upgrading software and hardware in the current tough economic climate”, said David Haigh, CEO of Brand Finance plc.

The update also reveals some interesting global trends:

  • Between January and September the enterprise value of the 100 most valuable globally branded businesses has decreased by 13.3 percent, a drop of US$1.6 trillion.
  • Between January and September the brand value of the 100 most valuable Global brands has decreased by 4.2 percent, a drop of US$67 billion

For a more detailed analysis of the Brand Finance Global 500 report, visit www.brandfinance.com