Samsung has the biggest market share of mobile phones due to its flexible market positioning. Comparing between Samsung and Apple, on a single phone, none of its generally high-end phones had ever been up to the integrated experience of iPhone. But Samsung is showing its more steady determination on progressively making a better phone than Apple is. Apple is using a "gradually upgrade" strategy avoiding disturbing its users, and I'm afraid iPhone will someday be replaced by Samsung's phone.

Samsung can make all these progressive changes because, unlike Apple, they don't have to worry about disrupting the ecosystem - Google takes care of all of that and some might say they are doing a good job of it, but most would be inclined to say that the fragmentation is getting out of hand (as well as piracy, but that's another topic altogether). Yes, Samsung has compelling hardware specs, but they continue to use a cheap plastic material that only degrades the value of the phone, IMO. I think Apple is taking the right approach, thinking things through instead of making changes for the sake of making changes. Hardware-wise, I think they are on a safe progressive path. Software/OS-wise is where they are going to start hurting.

The software competition has only begun to heat up - Android isn't Apple's only competition (and a few steps ahead in that competition IMO); Windows Phone 8 is a force to be reckon with not only because it is, seemingly, a solid OS improvement to an already solid OS (not to mention utilizing a new and more robust kernel instead of skinning Windows CE), but also because of the upcoming arrival of Windows 8. If Windows 8 takes on a huge market share, and if Microsoft integrates the phone software effectively with the OS, a lot of people are going to feel compelled to join that ecosystem - especially those who aren't already heavily invested in the current ones. Apple needs to catch up on software, period.

Kanaca is right about the software competition heating up. Android used to be nowhere near iOS in terms of features and sophistication and Symbian/Windows etc. wasn't even on the radar.

Now, Android is catching up and Windows 8 offers the first viable, unique alternative to the UI that iOS has popularized. Android's advances mirror Google's approach to try anything and everything and see what sticks. They come up with new ideas and "features" all the time and typically throw them out there for the Android community at large to accept/reject. This is a strength in some respects because of the rapid pace of development compared to Apple's more measured approach.

However, as Randy said, this is done to avoid disturbing current users and therein lies Apple's long game IMO. This approach has served them very well as they add more and more users of iOS not only on the iPhone but the iPods and iPad as well. The ecosystem is the play and the device is just the conduit. The millions of iDevices are now being tied into the laptop/desktop environments with recent releases of OSX. It becomes increasingly more difficult for people who have invested a lot of time/money in Apple to make a switch, not unlike a photographer that has thousands of $$$ in a particular lens system.

Apple has been able to maintain their position as the "most desired" device while tenaciously clinging to their users. Advantage Apple.

Thanks you, both Kanaca and Andy. It's truly clinging for many iDevices users in the case that they've got used to Apple's ecosystem. I'm an iDevices user in China, and many of my relatives and friends are using iPhone. But in my observation, middle-agers use the very limited functions of it, like messaging, making phone-calls and taking pictures. They may be less clinging to iDevices if Samsung comes up with more well-designed phones. What prevents me most on switching to Android phones is the UI design(Android 4.1 is as smooth as iOS). Apple catches consumers' eyes with both industrial and UI design.

People in China would rather buy a good-looking phone with higher price than a ordinary-looking phone with sufficient functions and lower price. A celebrity named Laoluo in China is building a well-designed ROM of Android, and that could be a change on Android's poor UI. Its release is at the end of this year. Hope it will catch both of your eyes. ：）

Apple will remain strong and will still sell the iPhone 5 with insane numbers. But that does not mean it will be good for them in the long run. Google is continously polishing the entire Android Ecosystem and with iteration, Apple looses "perceived" advantage. Does anyone still remember how iOS users bragged about Instagram and Flipboard? Its only a matter of time before Android (Samsung) overwhelms Apple.

Quite frankly Apple is stuck because they can't really innovate around iOS without damaging the Ecosystem. For instance, the new iPhone has slightly fragmented the system leaving any serious developer to have to make two versions of his app for iPhones (rewrite his code to handle the two screen sizes.. not sure how it will be done)

Ody, I agree that Google continues to polish Android with each iteration but so does Apple. The availability of Instagram, Flipboard and other apps on Android is less a function of the improved OS and more a function of the gain in market share making the financial feasibility of releasing on Android more attractive.

I believe Apple is far less fragmented than Android. Android phones have a wide variety of sizes and suffer from the inability to upgrade to the improved OS releases. Apple was smart to keep the current screen width on iPhone 5 to allow "legacy" apps to run perfectly. Much like OSX, iOS continues to become more fluid with each release keeping current users happy and consistently bringing new users with each release.