Apple, Inc.'s iPad Regains Customer-Satisfaction Crown

Apple takes back the crown for tablet customer satisfaction -- but did Apple ever lose it in the first place?

May 10, 2014 at 3:40PM

In J.D. Power's just-released 2014 U.S. Tablet Satisfaction study, Apple's (NASDAQ:AAPL) iPad earned the highest overall score. The move puts Apple back at the top in J.D. Power's study and gives Apple the bragging rights of ranking first three different times. Apple's dominance in customer satisfaction is one of the tech giant's strongpoints -- a factor that helps qualify the stock as an excellent long-term holding for investors.

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Did Samsung ever really displace Apple?
While the fact that Samsung beat out Apple's iPad on last year's J.D. Power tablet customer satisfaction survey paints the Cupertino-based company's 2014 win as a comeback, a closer look reveals Apple may have never really lost any ground in the first place.

Last year, J.D. Power's results were heavily criticized when Apple clearly beat out Samsung on performance, ease of use, physical design, and features. Even though Samsung scored four out of five of J.D. Powers "Power Circles" or less on every individual category, the manufacturer somehow came out with an overall satisfaction score of five power circles and a score of 835 that barely slipped past Apple's 833. Samsung seemed to have won the survey based solely on cost, a category where Samsung earned four out of five circles and Apple earned just two.

Nothing new
A closer look at this year's findings suggests very little has changed regarding the scores. Yet, somehow, J.D. Powers decided Apple won this year. Beyond the fact that Apple ranked first in the study, J.D. Power's description of this year's outcome sounds awfully familiar:

Apple ranks highest in overall satisfaction with a score of 830 and performs highest in all study factors except cost. Samsung ranks second with a score of 822 and achieves above-average scores in the features, styling and design, and cost factors.

While J.D. Power's chosen winner for each survey doesn't appear to always reflect the underlying overall customer satisfaction, Apple's dominance across the multiple studies highlights its emphasis on the customer experience. Only losing once, it's clear that Apple puts customer experience at the top of its priority list.

Ipad Air Ipad Mini

iPad Air and second-generation iPad Mini. Image source: Apple.

Fortunately, making customer experience a priority has a positive impact on Apple's bottom line. Particularly, it empowers Apple to charge a higher price for its iPad while still selling more tablets than the majority of manufacturers in most markets. As J.D. Power notes, the overall tablet market seems to be subject to a price war; the average tablet selling price has dropped between $390 in 2012 to $337 in 2014. But Apple's fourth-quarter average iPad selling price comes in about 38% higher, at $465. And also worth noting, Apple's average iPad selling price is actually up $16 from the year-ago quarter. It's this high customer satisfaction-enabled pricing power across Apple's product lines that helps the company rake in the majority of industry profits in the smartphone and tablet markets.

J.D. Power's 2014 survey results that continue to give Apple's iPads the highest ratings among other tablets for all surveyed factors except cost offers further evidence for Apple investors that its high-end customer experience hasn't wavered. Importantly, given how vital customer experience is to the long-term thesis for Apple stock, this is great news for Apple investors.

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Daniel Sparks owns shares of Apple. The Motley Fool recommends and owns shares of and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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