So, it's clear that Apple is starting to feel the heat from Android:
Steve Jobs doesn't usually make a guest appearance on Apple's post-earnings conference calls with analysts, but this time he made an exception, attacking Google for marketing its operating system as 'open' versus Apple's 'closed' iOS.
Jobs' points here are, not to put too fine a point on it, pretty weak. While Android isn't a utopian greenfield of openness, they are actually Open Source, and haven't pulled any crap like trying to dictate development tools. Steve's objection that vendors like Motorolla put some of their own secret sauce on top and "the user's left to figure it out" is also bogus. My Droid and my friend's HTC Incredible have subtle differences, but it's the same UI set. Moreover, users don't flit between these things. It's not confusing for them because they only have one phone, dude.
While I'm sympathetic to Jobs' point about the virtues of an integrated platform (e.g. there are some Android apps that have issues with the touchscreen keyboard on my Droid), I think he drastically overestimates his ability to anticipate what people want. The downfall of Apple is generally their ego. When they are wrong, it hurts them a lot, and they're slow to recover. In a fast-moving world, the open approach has a lot of advantages so long as you can keep the quality up.
I for one look forward to the Apple iPhone vs Android battle of the mobile Operating Systems. It's going to produce a lot more/better innovation than Windows vs MacOS. Neither company is currently dominant, and both are smart and creative and innovative. Should be good to watch what happens.