Is Windows or Android not an asset? Is it not the dominant asset in terms of value, even if manufacturing electronics at scale is larger in physical terms?
No. Tandy (aka Radio Shack), Dell, Compaq, and so forth commoditized PC Hardware.
Microsoft made the OS a commodity, reducing the cost of an OS from thousands of dollars to only $100. Android / iOS have done the same thing except reduced the cost to $0.
The hardware manufacturers don't make as much as the software guys. Because people and habits are tied to the software, not hardware.
Most people didn't care if they had a Dell or a Compaq, as long as it ran Windows.
So in this case: I don't care what hotel I stay in or who rents me a car, as long as I know that through Priceline I'm getting a good deal.
It's the same in travel, where the airlines and hotels are selling commodity products, and the high value is in the brokers people trust to select among the commodities. But the brokers here are also in still competitive positions, because it's still easy for consumers to switch compared to something like an OS or social network.
Marketing people sell value, they don't create it.
To the company and its owners, if my brand allows me to sell an equivalent widget for a higher margin, how is that not value? Just because value can be created or destroyed by a single action doesn't mean that value is somehow less valuable.
To the user, if I derive greater pleasure because I believe I have bought a more valuable product (attributable only to the brand), just because there is an equivalent widget out there, does that somehow discount my pleasure?
What even, is the basis on which, in this hypothetical scenario, we have determined the widgets are equivalent? Surely there is some subjectivity that would be driven by people's opinions, influenced directly or indirectly by brands, in that decision.
Soap bubbles are beautiful but you wouldn't pay money for one because you know how ephemeral they are. The value in brands is the expectation of future revenue that will inure to them. I'm saying that not only is this fragile, if it's destroyed then it's not good for anything else. By contrast, suppose the Fancy Hotel Company goes bankrupt through mismanagement; you still have an actual fancy hotel - an aesthetically pleasing building, comfortable furniture, experienced staff, logistical relationships with suppliers etc. Changing the name on the building to the Cosy Hotel Company would be a sales problem in the short term, but would have zero impact on the actual operation of the hotel itself.
To the user, if I derive greater pleasure because I believe I have bought a more valuable product (attributable only to the brand), just because there is an equivalent widget out there, does that somehow discount my pleasure?
Yes. Let's take a simple example - processors. I'm sure you can think of reasons why some prefer Intel and others prefer AMD, and why those different choices might be valid depending on the users' criteria. But which processors do you think HN runs on?
You probably don't know or care because it makes no functional difference to you. You might still have preferences about the next computer you buy but only insofar as you can imagine it making a quantifiable difference to you.
As a consumer, your contribution to brand value is only as good as your knowledge of what makes a branded offering unique and irreproducible.
But sure, they do help extract higher margins.
explain?
Put it this way, suppose the C-suite and the board at Priceline went insane and wiped all their own servers before leaping out of their penthouse windows. It would disrupt the travel industry, but it wouldn't be that difficult to build another price aggregation network - the infrastructure is already there. And a year later, nobody would care.
Consumers aren't nearly as invested in brands as marketing people like to imagine, they're just lazy and stick with whatever works OK. Can you imagine consumers feeling sad about the demise of Priceline or any other major brand? If Geico went out of business I'd feel a little bit of nostalgia for those animated gecko commercials and might reminisce that they were a good company to do business with, but that's about it.
Physical assets are a known quantity for better and for worse. They intrinsically depreciate. On the other hand, Brands grow over time from word of mouth and other marketing, so long as their final product is at least average.