This was destined to happen. There are simply more Android phones produced than iPhones by a variety of manufactures in multiple form factors. Still, I believe the Android operating system is a pound-for-pound, capable competitor and sound alternative to the iPhone and iOS.
Though perhaps not as intuitive, I can do as much and more with the Evo than I could with my iPhone and many of the equivalent Evo applications are f-r-e-e.
Still, nothing compares to the iTunes integration of the iPhone by way of multimedia integration and this is where Android still has lots of room to catch up.
Apple will have to be careful with cannibalization: if I don’t have an iPhone but can fulfill my multi-media needs with an iPod or iPad, is it better that Apple still has a customer who purchased a device other than an iPhone or have they lost a dedicated repeat sales opportunity by not having a customer whose phone and media preferences are tied to a singular device?