Alphabet usurps Apple from top of innovation list as companies make AI moves

Dive Brief:

Google's parent company Alphabet topped the list for BCG's 50 most innovative companies for 2019, followed by Amazon, Apple and Microsoft, according to the report. Alphabet knocked Apple off the No. 1 spot for the first time in 13 years.
The top 10 most innovative companies "extensively use AI and platforms," according to BCG. Alphabet proves this with innovations in Android and autonomous driving venture Waymo. Amazon has Alexa and AWS, Apple has Siri and a virtual workplace in its iOS platform, and Microsoft has evolved from solely offering software to offering AI and the cloud services.
T-Mobile joined the list of innovators for the first time while Adidas, SAP and Phillips jumped 10 positions from their rankings in 2018.

Dive Insight:

More companies are flirting with the technology company branding and closing the gaps in innovation.

Innovative incumbents often include companies that are decades old. These companies include household names like Johnson & Johnson, which ranked 14th on BCG's list.

Nearly three-quarters of C-suite officials say they outperform digital giants, namely Apple and Google. This is in part because legacy companies own about 80% of the world's commercialized data.

The main difference between incumbents and giants is the relationship they have with customers and how they use consumer data. While leaders like Google often pioneer innovation, it's not without a dose of scrutiny.

A company's ability to remain competitive will depend on how it leverages data. Using data effectively, while adhering to regulations, is a test some digital giants are struggling to pass.

Google's established expertise in AI, billions of training examples and its Tensor Processing technology were used to perfect its Smart Compose feature in Gmail (the one that predicts the end of sentences), according to BCG. But the accumulation of data under Alphabet's watch landed Google GDPR's largest fine yet.

Companies that rely on customer data but don't directly try to monetize it fair slightly better than others. McDonald's came in at No. 21 because of its use of AI algorithms in digital menus.

The bulk of the innovators on BCG's list are tech companies, but the industry outliers that join them are finding ways to appeal to the digital consumer. Adidas is personalizing experiences for shoppers on its mobile app and Walmart, which ranked 42nd, has an innovation lab with Microsoft.