Unlike the moribond non-Apple tablet market, Android phones are giving the iPhone a run for its money. Android and Me has a run down of eight new Android phones coming to Verizon alone in the next few months. There are multiple 4G models, different screen sizes, a waterproof-ish model and one that might, maybe be similar to the Motorola Atrix (currently exclusive on AT&T). They'll all be going against the expected iPhone 5 pretty soon. Should be a good fight.
One problem Apple had in the PC market for many years was its monoculture for hardware falling behind the diversity of Windows hardware -- there was almost always a faster, "better," or cheaper PC versus the Mac. Could be a problem in smart phones sooner or later too, especially with Apple doing its own custom chip designs.