My wife and I have had "smartphones" (starting with Palm and the older Windows Mobile) for pushing 10 years now. We'd had Android phones for about 4 years, then we switched carriers in October. My wife decided she wanted to give an iPhone a try. I have an iPad for work, and she liked how it worked. She liked it for a couple of weeks, then the limitations started to get in the way. No external storage. Certain apps not available that she wanted. Settings she wasn't allowed to change such as default apps. In March we got her a new S4 and gave the iPhone to my daughter. 6 months is all she could stand being locked into Apple's walled garden. She didn't realize how open the Android system is in comparison to iOS.
If anything, I think Cook has it backwards. People go in looking for a smart phone and get sold an iPhone instead. If people are looking for an iPhone and walk out with an Android device I think it is more likely because of the price difference from an entry-level Android vs. an iPhone. It is very doubtful that they don't understand the difference with all of the marketing and hype surrounding both platforms. That or Apple is seriously underestimating the cognitive abilities of its customers, which is insulting at best.