EDIT: This will be my last entry on the whole iPhone vs Android debate for at least a year. This is one of those topics that is just entirely unproductive: All of the online comments, blog entries, and defensive "don't move my cheese" posts do absolutely nothing to change industry direction, trends, etc. I don't wish to contribute to that noise any further, and had argued only in the sense of balance: For too long the conversation has been completely dominated by shills and short-sighted developers only interested in their own convenience (there is a certain allure to the global dominance of one single make and model of device, even if long-term that brings a lot of pain. It is notable that Tim is praising a device that almost certainly wouldn't exist in its current form were it not for Android, but it's remarkable what competition does for the sense of urgency).
If Marco Arment wrote this post in January of 2010 I could write it off as a case of self-inflicted, temporary delusion. To see it written now, however, is perplexing.
Arment and others are screaming, with increasing desperation, trying to change the direction of tides that they have absolutely no influence over, and that derives from forces that they clearly don't understand.
A mistake that many Apple "fanboys" make (the sort that are going to argue with Fred Wilson about marketshare numbers, which I suspect is a tiny subset of the overall Apple consumer population) is to assume that the general smartphone marketplace has two types of consumers, broadly defined as-
A variation of this theme is that the second category is full of people so full of anti-Apple vitriol that they buy an alternative simply to spite Apple.
You, and the people you hang out with, are not the average consumer. The sooner you understand that, the sooner you can understand why the market moves in the way that it moves.
As one of many anecdotes, my brother and his partner recently decided to get smartphones to stay more connected. I don't proselytize to the Android side, in many cases actually encouraging those who asked to instead get an iPhone, so I had no influence on their decision process.
They went to the telco store where they had many options — the iPhone has long been available on all major carriers in Canada — leaving with a Samsung Galaxy S for her and an HTC Desire Z for him.
They had the means and the opportunity to have any device possible, and they left with a couple of Android devices.
The normal consumer that makes up most activations doesn't read Engadget or Gizmodo. They don't argue with Fred Wilson. They don't take sides.
They simply want a smartphone that can let them efficiently use email and the web, maybe hit up Facebook and Twitter, take and view pictures and perhaps videos, and perhaps enjoy some casual gaming. That is the actual criteria (not "Apple or not Apple"), and its one where for clearly many consumers the decision tree leads to an Android device. For someone who wants a larger screen, or a smaller screen, or a keyboard, or various other options, it becomes the only choice, even if incidental.
Understand this and trends and marketshare shifts will come into focus.