Over the weekend, I saw a bunch of ads for the Droid phone from Verizon. It seems their main selling point was how more powerful the phone was and they are correct. It will always be the case that Android phones will always have the latest and greatest hardware, just like with most Windows laptops. Apple will never make devices with the fastest processors, the most RAM, the hardware latest innovations. What Apple has made a very calculated decision on is they would rather have a more polished product than one with the best specs. They weren't the first with a front facing camera but I bet mobile video chat will explode because of their implementation and not any one else's that came first. Same thing with multi-tasking. Not the first, but a more smooth integration.
For a long time there was this pseudo arms race in the tech industry of who could cram the most transistors on a chip or the most pixels on a screen or crank up a few more Mhz from a CPU. I think we've gotten to a point where the vast majority of us have way too much horsepower in our devices. Now the question is who will use that horsepower in a way that appeals to us. Apple seems to be leading in that sense... for the time being.