Why Apple and 9 Other Companies Are Losing Popularity

Consumers are increasingly skeptical of corporate America.

By SHARE

Amazon has pulled off an impressive coup by unseating Apple as the most reputable company in America. But the more important trend may be the declining reputation of corporate America in general, and the opportunities open to companies that can persuade skeptical consumers to trust them.

[PHOTOS: Celebrating Mardi Gras 2013]

For the first time, Amazon took the top spot in the annual Harris Interactive survey of corporate reputations, with Apple coming in second. The other members of the top 5 were Walt Disney, Google and Johnson & Johnson.

But this year only six companies earned scores Harris considers indicative of "great" performance, down from 16 two years ago. That corresponds with surveys from Gallup and others that show declining trust in most U.S. institutions, including banks, the media and especially the government. "The public seems to be saying two things," says Robert Fronk of Harris. "They want companies to stop playing it safe, and to reassert themselves and the value they can provide."

Many companies play it safe, of course, because making mistakes is one of the things that dents a company's reputation. So does a weak business performance and anything that compromises the trust of customers. Here are the 10 companies with the biggest decline in reputation in Harris surveys during the last year:

Apple CEO Tim Cook speaks during Apple's special event at the California Theatre in San Jose on October 23, 2012 in California. Apple unveiled a smaller version of its hot-selling iPad on Tuesday, jumping into the market for smaller tablet computers dominated by Amazon, Google, and Samsung. The iPad mini's touchscreen measures 7.9 inches (20cm) diagonally compared to 9.7 inches(24.6cm) on the original iPad.

Best Buy. Reputational rank: 44. The electronics retailer is struggling to protect its turf from online competitors such as Amazon and discounters such as Wal-Mart and Target. Adding to its woes, former CEO Brian Dunn resigned last year after an inappropriate relationship with an employee. And founder Richard Schulze has been mounting an aggressive effort to take the company private, generating more controversy.

[SEE: 20 Industries With Record Number of Jobs]

Honda, 25. This Japanese automaker suffered rare criticism when its Civic subcompact, redesigned for the 2012 model year, was trashed by reviewers and bumped from the Consumers Reports recommended list for the first time. Honda executed an emergency makeover, upgrading the Civic's interior and adding new standard features, which ought to help restore the company's reputation.

Kraft, 12. This food conglomerate split into two companies in 2012, with a new entity called Mondelez taking control of popular brands such as Oreo, Toblerone and Chiclets. Kraft Foods retained brands such as Planters, Jell-O, Maxwell House and of course Kraft. Since new names tend to confuse consumers, that may explain the reputational decline.

Microsoft,15. Once considered a visionary company, Microsoft has performed more like a utility in recent years, with few products that have wowed consumers and underwhelming stock appreciation. Its new Windows 8 operating system and the Surface tablet device—which has been earning strong reviews—could help generate a bit more excitement at the company.

[SEE: The 10 Worst Industries for 2013]

Hewlett-Packard, 34. This tech giant has been stumbling for years, with the latest big controversy being the $11 billion acquisition of a software firm later discovered to have inflated its value through fishy accounting. HP's stock has fallen 34 percent since the beginning of 2012.

Pepsico, 23. This snack and beverage company has done well lately, but it pulled a poor-selling line of low-calorie Gatorade from shelves in 2012 and is a frequent target of activists aiming to cut the amount of sugar, salt and fat in the American diet. Talk of new "sin taxes" on snacks and sodas doesn't help Pepsi's reputation.

Wal-Mart, 40. It's still the king of retail, but Wal-Mart is also a huge target for corporate critics and worker's rights advocates. The company was snared in a Mexican bribery scandal last year, and some employees picketed at a handful of stores to demand better pay, benefits and working conditions. Wal-Mart says it plans to hire more full-timers with benefits and do other things to improve its image, such as hire any veteran who wants a job.

Apple, 2. The tech giant is still hugely profitable, but its shine has dimmed as hit products like the iPhone and iPad mature and tech junkies wonder whether the Apple magic is wearing off. Apple has also suffered from exposes of strenuous work conditions at overseas suppliers such as Foxconn. Still, Apple's reputation remains extraordinarily high. "It has fallen from uber great to just really great," says Fronk. IBM, 28. This stolid tech company no longer builds consumer products and mostly targets businesses, which may detract from public awareness of its activities. There was also a minor kerfuffle last year at the Masters golf tournament, which IBM sponsored even though its CEO, Virginia Rometty, wasn't invited to become a member of the all-male Augusta National Golf Club that hosts the tournament. (Augusta has since changed its policy and admitted two other women.)

J.C. Penney, 37. A high-profile effort to turn this lowbrow retailer into a flashier and more profitable chain has flopped, prompting a second makeover that includes a return to discounting. Some critics feel the chain is beyond reviving, with news about the floundering turnaround effort generating more attention than anything the stores have to offer.

Rick Newman's latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.