Not only that, but they are masters of creating a 'design ecosystem'. Browse apple.com, then head to the apple store, its a seamless experience. This is arguably one of the competitive advantages that has helped Apple maintain it's position in the market and with consumers everywhere.
The reason Apple's been successful is that they occupy a small but passionate niche of customers that are completely underserved by Microsoft. Most users don't care about design - but the ones that do care a lot, and will pay a premium for something that pays attention to their needs. There's probably room for a similar competitor to Google, but nobody's found it yet.
Most users don't care about design? I think the number of the different Apple products sold say otherwise. A phone that anyone can pick up and use many of the features without reading a manual, thats a byproduct of brilliant design on many levels. Whether people care or not, they connect with it and are put in a position where they now have feelings for a piece of technology. When they then decide to make that purchase they very much care about design.
Microsoft products have indeed been successful, but other than the xbox (and we're talking consumer electronics here not OS's) what has been the other runaway hit they've made? The zune is a great media player, but came about after msft assembled a team and put them in a room with an ipod and told them to make something better.
The growth in sales from Apples products combined with their increasing marketshare in the desktop and mobile spaces are very indicative of consumers demanding better designed stuff. Apple's in-house iterative process is best positioned and most efficient at making products that are in line with that.