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.
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.
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.
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.