ACSI Commentary September 2012

Technology Innovation Plays Role in Stronger Customer Satisfaction for Durable Goods

Commentary on Major Appliances, Personal Computers, and Televisions & Video Players/Recorders

September 18, 2012

Personal Computers

The sea change in consumer preferences continues for the personal computer business, with purchases of desktop PCs stalling due to the growth in demand for technologies with an emphasis on small and mobile. Products like new, ultrathin laptops, tablets, and smartphones are becoming increasingly capable of doing the vast array of tasks that people used to be tied to their desks to accomplish. Amid this shift, customer satisfaction with personal computers of all types (desktop, laptop, and tablet) gains 2.6% to an ACSI score of 80 (on a scale of 0 to 100), breaking the former high of 78 reached in each of the past two years. The improvement is driven, in part, by the higher levels of customer satisfaction that tablet PCs enjoy over desktops and laptops. As tablets gain market share, overall customer satisfaction with the PC industry picks up.

The shift away from traditional PCs should be beneficial for Apple. The company’s market share has grown considerably with its iPad products—from around 8% for the period between 2007 and 2009 to 12% in the past two years. Apple’s stock price, which has seen phenomenal growth over the past decade, has gained nearly 200% in just two years since the first iPad was released. This year, Apple maintains its customer satisfaction lead despite a slight dip of 1% to a score of 86. The company continues to outdistance all competition by a wide margin.

Nevertheless, Apple’s lead has narrowed, as the rest of the industry does better with the customers they are able to keep. Windows-based PC maker Dell advances 5% to second place with an ACSI score of 81. Still, the news for Dell is mixed as it comes at a time when the company’s market share is shrinking, principally in the consumer market. Dell’s PC shipments are down nearly 10% for Q2 2012 compared to the previous year and its stock price has plunged 25% over the same time period.

A similar phenomenon appears to be playing out for the other large Windows-based PC makers. Both Hewlett-Packard and Acer make small gains to ACSI scores of 79, but HP’s Q2 2012 shipments are down 13% while Acer’s fell 14%. HP’s stock has lost about half of its value over the past year. Toshiba rounds out the industry debuting at the bottom with a score of 77. Among the top five U.S. market-share leaders, Toshiba’s shipments have taken the biggest hit, down 20% from a year ago.

Meanwhile, the aggregate of smaller manufacturers (including tablet producers such as Samsung and Amazon) improves in both customer satisfaction and market share. The group’s ACSI score is up 4% since 2011 to 80 and its shipments have increased 12% over a year ago, besting even Apple’s 4% gain. What appears to be happening is that as the least satisfied customers of Dell, HP, and Acer (among others) defect to Apple and to the smaller brands (particularly tablet PC makers), customer satisfaction improves for all—both the companies that lose customers and those to whom these customers migrate.

Televisions & Video Players/Recorders

Customer satisfaction with televisions and Blu-ray Disc (BD) and DVD players remains among the highest of all industries covered by the ACSI. This year, the industry gains 1.2% to a score of 86, a new high for the category. Consumers seem quick to embrace the latest technologies, with flat-panel TVs now making up more than 90% of all sales. While prices have risen for higher-end TVs, such as those that offer 3D or Internet features, prices for smaller or more standard flat-panel TV sets continue to drop. Similarly, consumers are finding the latest DVD and BD players both more powerful and affordable, with the combination of higher quality and greater value for money creating a positive effect on customer satisfaction.

Major Appliances

Customer satisfaction with major household appliances like washers, dryers, dishwashers, refrigerators, freezers, ranges, and ovens is generally very stable. Since 1994, the industry’s ACSI score has been in the range of 80 to 82 for most years, despite changing economic conditions. In 2012, customer satisfaction with major appliances is flat at 81 amid continuing soft demand.

Among the largest appliance makers, Whirlpool consistently has been on top in both market share and customer satisfaction, holding at least a share of the ACSI lead each year since 1996. For the current year, Whirlpool gains 1% to 83, narrowly topping AB Electrolux, which improves 5% to 82. General Electric also makes progress, up 1% to 80, but trails well behind Whirlpool. The only downturn in the category is for the aggregate of smaller manufacturers (including LG, Samsung, and Bosch), which plunges 5% to 79 and drops from the highest score among all brands a year ago to the industry basement. The culprit seems to be recent price hikes for these brands caused by increased import fees.