Apple doesn't do business like other technology companies. They don't do any market research nor hold any focus groups. They spend money on advertising but far less than industry rivals and in spite of this their global brand recognition has increased year over year. When they first unveiled their aluminum, unibody MacBook Pro refresh, Steve Jobs and his industrial design right-hand man Jonathan Ive gushed over the new manufacturing process that made it all possible. They designed a brand new process because it was the only way they could execute this new design. I can't think of any other technology company that's ever done such a thing, let alone made it a focal point of a new product launch.
While other companies are fighting thin margins and are in a race to the bottom, Apple's margins are consistently high with iPhone margins nearing 60%. When you've sold over 50,000,000 iPhones with that kind of margin you're doing a lot of things right as a business.
Why Apple Wins
If someone is trying to understand why Apple products do well and they're putting them in a feature comparison matrix against competitors, they're already doing it wrong. When the iPod first launched it famously had "less space than a Nomad" but it ended up dominating the industry. The specs for Nokia's high-end smartphones blow the iPhone's away but their U.S. market sales are abysmal and almost non-existent. The iPad doesn't compare well against a netbook in a feature-to-feature lineup but it has over 2,000,000 sales in less than 2 months.
Apple's products sell because they focus on the overall user experience and how people actually use the device, from when they buy it in an Apple Store to the first time they open the lid on a MacBook Pro all the way through its lifetime. Apple treats each product as something special by itself; a treat for the person who bought it. Even the cheapest iPod nano has beautifully-executed packaging while other companies throw their most expensive products in a cheap, brown, cardboard box.
Apple products are easy to use. It's cliché to say this now, but people can pick up a brand new product like the iPad and figure out how to use it without getting frustrated. Apple's products work well. They don't get viruses and they don't get crapware automatically installed in the factory. Their products and user interfaces are beautiful and beautiful things just work better. When's the last time someone called a computer or phone beautiful that wasn't made by Apple?
The iPad was designed by people with taste, passion and opinions. It's an expression in minimalism and the missing features are a testament to Apple's philosophy just as much as the features they chose to include. No camera, no USB ports, no Flash, no multitasking (yet), no widescreen ratio, no keyboard. What it does do it does extremely well. Apple designers are curators. It's their job to say no, and they did, and many people bitched and moaned but they still sold an iPad every 3 seconds for the first 60 days.
Why Others Fail
When a computer company has over a dozen sub-brands that means no one is trimming the hedges, no one is editing, no one is caring enough to say no. Too many disparate decisions, too many hands in the pot. Too many committees, too much design-by-committee. Too many bland products without personality that don't get people excited.
Many companies are now planning to compete in the tablet space currently solely occupied by the iPad. They're planning to beat Apple by one-upping them, by adding features the iPad currently lacks, by being more "open" and more flexible. The problem is that no one is asking for this, no potential customers really care about "openness" or external USB ports on a tablet. People want things to work, work well, work quickly, and do the things they want it to do. Does the iPad do that? Yes. Is it fast, or more simply, fast enough? Yes. Does it have thousands of good apps available to download? Yes, and more are coming every day. Where are the gaps that a competitor hopes to fill? iPad customer satisfaction is at 91%. If a competitor wants to take down the iPad they have to beat 91%. Good luck with that.
Other companies fail because they don't know that details make or break a product. Most companies can get the big picture together — they can produce a thin & rectangular MP3 player, they can make a tablet-sized touchscreen device — but they fail on the details. The iPad has the best screen you can buy with millions of colors on a bright, sharp picture that's still pretty bright in daylight. Companies using OLED screens on a device you take outside have already screwed up an important detail. What's the main way you interact with a touchscreen device? By touch. I've used a Droid and a Nexus One and I can tell you neither of them have the screen reaction time of the first-generation iPhone let alone the 3GS. An iPhone has had perfect, fast touch recognition since Day 1. All Android devices I've used took a split-second longer than my iPhone to recognize when I touched the screen and I can tell you it's annoying, and it's definitely not how you beat the iPhone.
How To Beat Apple At Their Own Game
You can't, just like you can't beat Google at Search. You have to win at something else, something that your company is uniquely suited to do. This doesn't mean you shouldn't hire the most talented engineers and designers in the world, it just means you shouldn't go up against Apple on their own turf. The technology industry isn't a zero-sum game, there can be multiple winners. Win at something unique, don't worry about what Apple or anyone else is doing. Building great products that customers feel connected to is something every company should do.