Update on iPhone vs. Android
So where are we now. Android has taken over, in terms of number of handsets running it. That was rather obvious.
The consensus is, it's "Mac OS vs. Windows all over again". That's also hard to escape : a "luxury" product being offset by a cheap, not quite as good but "good enough" version, that surely rings bells. But it's a bit more complicated.
For one thing, the original Mac never had a market share comparable to the one of the iPhone. And, despite what old Apple fanboys would say, Windows quickly became better than Mac OS, at least because it had more useful programs running (boring, but useful : Lotus 1 2 3, Word, that kind of stuff). The original Mac was hardly a serious office machine, and Apple failed to turn it into one back then.
The other thing is, what's happening now in the PC market is that the Mac is gaining market share, and Mac sales are growing much faster than PCs. Also, Apple makes quite a bit of profit out of Mac sales, while most PC makers have paper-thin margins.
This clearly demonstrates that there's money not only in being the absolute market leader, but also in being able to offer better service and quality. Customers are willing to pay for that. The pre-sales numbers of the iPhone 4 on Verizon seem to corroborate it as well.
So a likely outcome is that, even though the iPhone market share will diminish compared to Android as a whole, it will still be much larger than any single Android handset, and also much more profitable (except may be for Google which will rake in the cash from ads and licenses).
On a related matter, there's the issue of "user freedom". iOS is a walled garden, no contest. But the claim that Android would make the user free is not being realised so far. Quite the contrary, all the mobile providers are taking advantage of Android's openness to do precisely what they couldn't do with the iPhone anymore : rebrand it. They have regained the power of control on the software updates and the services being provided. When Apple releases a new version of iOS, every iPhone upgrades in a matter of days (except for that big fuck-up that iOS 4 was on the 3G model), no matter the carrier. When Google releases a new version of Android... not much happens. There's no telling when your handset will actually run it, because you don't know when the handset maker or the carrier will decide push the update, and they need time to port their own added layer too.
There may be pressure from users against that, but I doubt it will make things any different. Only geeks will have a problem with that situation, regular users won't care or even know about the problem.
And then, there's the new Nokia/Microsoft partnership. And HP's WebOS. It tempting to dismiss them as too-little-too-late, but who knows...