The results mirrored the strengths of the two companies. Samsung had strong marks for the cost of its tablets, and Apple scored well in performance and ease of operation. October 31, 2013 11:07 AM PDT An excited Tim Cook at the Apple Store in Palo Alto, Calif. as the iPhone 5S and 5C go on sale. (Credit: James Martin/CNET) "We are not solely focused on unit share as I've said many times, but we're focused on usage in customer's side, the loyalty and other things that are very important to us," Apple CEO Tim Cook said during the company's fourth quarter earning call Monday. So far that focus has worked out for Apple, but the competition is starting to encroach on the company's sacred ground of customer satisfaction. In a recent J.D. Power Tablet Satisfaction Study, Samsung achieved the highest score (835), followed closely by Apple (833). The results mirrored the strengths of the two companies. Samsung had strong marks for the cost of its tablets, and Apple scored well in performance and ease of operation. (Credit: J.D. Power) In addition, Apple's tablet sales have been in decline, with sales flat year over year. In the latest IDC survey, Apple's iPad share has shrunk from 40.2 percent to 29.6 percent in the last year. Samsung has grown from 12.4 percent to 20.4 percent during the same period. In part, Apple's share has been impacted by the lack of new products. With the new iPad Air and iPad mini with Retina Display, Apple should see some of its share loses erased. But Cook insists that the most important metric to measure the value of Apple's tablet business is customer usage. He conveniently cites stats from Chitka that the iPad accounts for 81 percent of tablet usage in North America. In an interview with Bloomberg BusinessWeek, Cook said, "Does a unit of market share matter if it's not being used? For us, it matters that people use our products. We really want to enrich people's lives, and you can't enrich somebody's life if the product is in the drawer." Despite losing market share, Apple hasn't lowered prices, or its healthy gross margins, to attract more buyers. "Interestingly, in an environment where competitors on both the Android and Windows sides of the market are using price cuts as their most powerful marketing tool, Apple actually increased its revenue per iPad unit in the third quarter by $3," noted Rhoda Alexander of research firm IHS. "Hardware profit plays a big role in Apple's success, enabling the design, durability and performance innovations that in turn support Apple's premium pricing." The reviews of the new iPad Air support "premium" Apple gets, even for an incremental upgrade from the previous version. "Functionally, the iPad Air is nearly identical to last year's model, offering only faster performance and better video chatting. But factor in design and aesthetics, and the iPad Air is on another planet. It's the best full-size consumer tablet on the market," said CNET's Tim Stevens in his review. The way Cook sees it, Apple is well positioned to bring new products to market that follow in the tradition of the iPod, iPhone and iPad -- premium products that redefine a product category, gain dominant market share and later become a large, profitable niche. I have said that you would see some exciting new products from us in the fall of this year and across 2014. And I obviously stand by that and you've seen a lot of things over the last couple of months," Cook said during the fourth quarter earnings call. "In terms of new product categories, specifically if you look at the skills that Apple has from hardware, software and services and at incredible app ecosystems, these set of things are very, very unique. I think no one has a set of skills like us, and we obviously believe that we can use our skills in building other great products that are in categories that represent areas where we do not participate today. So we're pretty confident about that."
The results mirrored the strengths of the two companies. Samsung had strong marks for the cost of its tablets, and Apple scored well in performance and ease of operation.
An excited Tim Cook at the Apple Store in Palo Alto, Calif. as the iPhone 5S and 5C go on sale.
(Credit: James Martin/CNET)
"We are not solely focused on unit share as I've said many times, but we're focused on usage in customer's side, the loyalty and other things that are very important to us," Apple CEO Tim Cook said during the company's fourth quarter earning call Monday. So far that focus has worked out for Apple, but the competition is starting to encroach on the company's sacred ground of customer satisfaction.
In a recent J.D. Power Tablet Satisfaction Study, Samsung achieved the highest score (835), followed closely by Apple (833). The results mirrored the strengths of the two companies. Samsung had strong marks for the cost of its tablets, and Apple scored well in performance and ease of operation.
(Credit: J.D. Power)
In addition, Apple's tablet sales have been in decline, with sales flat year over year. In the latest IDC survey, Apple's iPad share has shrunk from 40.2 percent to 29.6 percent in the last year. Samsung has grown from 12.4 percent to 20.4 percent during the same period. In part, Apple's share has been impacted by the lack of new products. With the new iPad Air and iPad mini with Retina Display, Apple should see some of its share loses erased.
But Cook insists that the most important metric to measure the value of Apple's tablet business is customer usage. He conveniently cites stats from Chitka that the iPad accounts for 81 percent of tablet usage in North America.
In an interview with Bloomberg BusinessWeek, Cook said, "Does a unit of market share matter if it's not being used? For us, it matters that people use our products. We really want to enrich people's lives, and you can't enrich somebody's life if the product is in the drawer."
Despite losing market share, Apple hasn't lowered prices, or its healthy gross margins, to attract more buyers. "Interestingly, in an environment where competitors on both the Android and Windows sides of the market are using price cuts as their most powerful marketing tool, Apple actually increased its revenue per iPad unit in the third quarter by $3," noted Rhoda Alexander of research firm IHS. "Hardware profit plays a big role in Apple's success, enabling the design, durability and performance innovations that in turn support Apple's premium pricing."
The reviews of the new iPad Air support "premium" Apple gets, even for an incremental upgrade from the previous version. "Functionally, the iPad Air is nearly identical to last year's model, offering only faster performance and better video chatting. But factor in design and aesthetics, and the iPad Air is on another planet. It's the best full-size consumer tablet on the market," said CNET's Tim Stevens in his review.
The way Cook sees it, Apple is well positioned to bring new products to market that follow in the tradition of the iPod, iPhone and iPad -- premium products that redefine a product category, gain dominant market share and later become a large, profitable niche.
I have said that you would see some exciting new products from us in the fall of this year and across 2014. And I obviously stand by that and you've seen a lot of things over the last couple of months," Cook said during the fourth quarter earnings call. "In terms of new product categories, specifically if you look at the skills that Apple has from hardware, software and services and at incredible app ecosystems, these set of things are very, very unique. I think no one has a set of skills like us, and we obviously believe that we can use our skills in building other great products that are in categories that represent areas where we do not participate today. So we're pretty confident about that."
