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?
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.
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
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