Apple Loses J.D. Power Customer Satisfaction Bragging Rights to Samsung

Just like that. Samsung has snapped up Apple's (NASDAQ: AAPL  ) bragging rights to the top spot on J.D. Power's tablet satisfaction study. Is Apple losing its cool-factor in the category Steve Jobs pioneered?

Results
Apple and the top spot over at J.D. Powers have quite the history. The iPhone has won highest customer satisfaction in the smartphone category nine consecutive times. And Apple's iPad topped the tablet rankings twice before slipping to Samsung. Even more, Apple prominently highlighted these rankings in its own "Why iPhone" and "Why iPad" marketing campaigns earlier this year.

But with Apple ranking second in tablets now, it's unlikely the company will be citing J.D. Powers as frequently; Samsung scored an 835 on a 1,000-point scale and Apple scored 833. Both tablets, however, earned an overall 5-star rating from J.D. Power.

A closer look at the results, however, seems to suggest that Apple's iPad is still impressing customers. As J.D. Power asserts, "The study measures satisfaction across five key factors (in order of importance): performance (26%); ease of operation (22%); styling and design (19%); features (17%); and cost (16%)." Apple scored five out of five on every category except cost, where Apple received a rating of two out of five. Samsung earned a three on performance and ease of use and a four on physical design, tablet features, and cost. And Apple lost?

Notably, J.D. Power provides small text next to an asterisk and below its power circle ratings that says, "Please note that jdpower.com Ratings may not include all information used to determine J.D. Power & Associates awards." But if these power circle ratings were the only factors used in the rankings, a rating scale based on these weights and scores would put Apple well ahead of Samsung. And if Samsung won based on price alone (the only category Apple didn't score higher than Samsung), why did Apple sell more than three times as many tablets as Samsung in the third quarter of 2013? Haven't consumers voted on price with their wallets?

J.D. Power may have decided to give Samsung the top spot. But Apple, apparently, is still doing incredibly well in the mind of the consumer. Apple's cool-factor appears to remain intact.

Apple's new iPad Air. Source: Apple.

Can Apple reclaim the top spot in 2014?
Notably, the J.D. Power study is the second tablet survey completed in 2013 referred to as Volume 2. It's based on the period between March and August -- right smack in the middle of this period Samsung launched a new line of Galaxy tablets: a 7-inch, 8-inch, and a 10.1-inch. Apple's most recent tablets during this period were considerably older, announced in October 2012. That said, Apple should have a solid chance at taking back the top spot in the 2014 tablet survey, especially considering the raving reviews of Apple's just-released iPad Air.

What's the takeaway for investors? Unfortunately, the study's methods seem so dubious that very little conclusions can be made. But it does suggest competition is heating up. And credible statistics from IDC seem to echo this notion. Though Apple may have had the greatest share of worldwide tablet shipments in the third quarter, its market share fell substantially, from 40.2% in the year-ago quarter to 29.6% today, according to IDC. Even more, Apple's tablet units sold during the period only grew only slightly from 14 million to 14.1 million.

Apple's new tablets look promising. But how will they fare with consumers? Will increasing competition inevitably limit Apple's growth potential in the tablet market? Could this questionable study be an early sign that Apple could struggle to grow its second largest segment in the future?

A closer look at Apple stock
Apple has a history of cranking out revolutionary products -- and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.


Read/Post Comments (11) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 02, 2013, at 10:30 PM, ninderad wrote:

    Quote: "But with Apple ranking second in tablets now, it's unlikely the company will be citing J.D. Powers as frequently; Samsung scored an 835 on a 1,000-point scale and Apple scored 833. Both tablets, however, earned an overall 5-star rating from J.D. Power".

    This study compare "old" Ipad against new Samsung tablet. Would you compare new Ipad Air against the latest Samsung?

    The result: Apple scored 1,000 on a 1,000 point scale and Samsung scored 835!

  • Report this Comment On November 02, 2013, at 11:18 PM, WineHouse wrote:

    Statistics are like poems: they are subject to widely-varying interpretations. Certainly if you remove the cost factor from the analysis, it's crystal clear from the JDPower data that the iPad owners are a good deal more satisfied with their tablets than the Samsung tablet owners are. On the other hand, Samsung has a much broader range of tablet products, ranging from their top-of-the-line stuff to, if you want to be frank about it, some rather flimsy low-end stuff. I would imagine that a more fair (or at least more accurate) comparison would be to limit the comparison to top-of-the-line iPads vs. top-of-the-line Samsung products. In other words, comparing Apples to oranges may be one thing, but comparing Apples to a mixed bushel of oranges, grapes, dried figs, persimmons, kumquats and mulberries is quite another.

  • Report this Comment On November 02, 2013, at 11:43 PM, Mathman6577 wrote:

    The part "Apple scored #1 in all categories except cost" should be emphasized in bold.

    Another stat could be added to the article. Apple made more profit last quarter than all other mobile techies, including Samsung, combined.

  • Report this Comment On November 02, 2013, at 11:45 PM, WineHouse wrote:

    BTW -- everybody seems so focused on Apple's stock price movements, yet one rarely (if ever) sees an article on Samsung stock price movements. Over the past 52 weeks, SSNLF has ranged from a low of 1,050 to a high of 1,500 with a most-recent close of 1,450. Compare that with AAPL, whose 52-week range is 385-597 and a most recent close of 520. APPL's most recent trailing P/E is 13 while SSNLF's is a bit less than 9. As far as I can tell, SSNLF does not pay a dividend. GOOG, with P/E of 28, pays no dividend. AAPL pays out current yield of 2.3%.

    Of course, Apple is a much more highly focused company, with respect to products, than either Samsung or Google. That could be viewed as either good or bad, depending on your crystal ball.

    Disclosure: If I have any "bias" at all, it's a bias against Windows products. I hold shares of GOOG and AAPL; I use Google Maps and Google is my default search engine on my MacBook Pro, my iPodTouch and my iPhone; I own two Samsung TV sets, and prior to getting my iPhone this year I was using a 2007 Samsung SCHa650 flip-phone that still worked as a phone but had lost most of its PDA functionalities (something in a chip must have gone haywire). Prior to getting my MacBook Pro in mid-2012, I had been using a 2007 Sony Vaio with Windows XP-Professional that decayed in performance and functionality over time to the point where it finally drove me bonkers (and no, I did not have a malware infection; I just had too many layers of XP updates, Norton updates, and coding complexities that led to electronic hiccups or worse, plus hardware problems like an increasingly noisy hard drive).

  • Report this Comment On November 03, 2013, at 12:26 AM, Padova wrote:

    Philip Elmer-DeWitt has shown the absurdity of J.D.Power's statement, and he awaits an explanation from JDP. It is obvious, instantly obvious, looking at JDP's own star system that Apple is preferred.

  • Report this Comment On November 03, 2013, at 1:19 AM, vik1ng wrote:

    Just curious, how much did Samsung pay J.D Power to come out with a result like this. 4 out of 5 and still loses the rating. Though they have put a notation, it could be a microscopic text that is irrelevant enough for the reader to realize the basis of their decision.

  • Report this Comment On November 03, 2013, at 1:48 AM, nealdoughty wrote:

    The kind of people who buy inferior products because they're cheaper are very easily satisfied.

  • Report this Comment On November 03, 2013, at 1:52 AM, djtetsu wrote:

    the truth of the matter is, Apple rules with the number of apps made for the ipad, whereas Android apps are simply phone sized apps expanded to a bigger screen. Unfortunately this doesn't fit into one of the five cateogies.

    and yes the new ipad/ipad minis will rule !

  • Report this Comment On November 03, 2013, at 5:59 AM, ddillan wrote:

    Another needlessly negative headline about Apple. When will a financial writer have the balls to headline "Apple wins again!" which could easily have been the banner for this article. I could cite all the points made by the other writers here, but the most obvious is the fact that Apple wins in all but price.

    I have to believe research shows they get more clicks on negative articles about Apple than positive so the directive is - spin it bad! (to hell with honest journalism)

  • Report this Comment On November 03, 2013, at 12:19 PM, thethreestooges wrote:

    JD Power study comes out on the heel of Apple's iPadAir shows how far reaching affect Samsung's marketing spent bashing its competitors. Samsung paid college students to write negative reports, paid analysts to write bearish articles, and trolls to bash on message boards. It's all money talks and Samsung's gangster mentality to buy any organization to rank them top spots is undeterred.

  • Report this Comment On November 03, 2013, at 2:25 PM, fauxscot wrote:

    Daniel....

    This headline could just as easily have read, "Samsung finally makes it barely ahead of Apple if you look at the older Apple and the New Samsung".

    Everybody panic, right? For 2 points? On old Apple hardware?

    You do plan on coming back when the piles of iPad Air and iPad Mini Retna reviews come in and blow the cheap subcompact doors off the Korean cart, right?

    Right, Daniel? Daniel?

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