I seriously think that Android is the best thing to happen to iOS. Despite the design flaws, fragmentation, issues and every other bug, Android is the nearest thing to a competitor that iOS has. Yes, I am aware there is something called Windows Mobile 7.
The very fragmentation and ubiquity of Android is its strength. While for US, I do not know how the economics work, but for a country like India, not everyone can or would afford to buy a phone for Rs. 30,000 (~USD 666.7). What Android is great at is tapping THAT market who are looking for a better than average experience with mobile. I mean if every one was going for the premium buyer who would make good experiences for the not so affluent.
I have an iPhone, an MBP and will now be spending on the iPad 2. But then I look around and feel so happy that my friends, my juniors from college can afford a decent enough phone without sacrificing on the joys of modern technology and design in mobile OS.
What does the average unlocked Android device cost there? In Thailand, most Android phones are still USD $400+. Oddly enough, last-gen Blackberry devices are the most popular smartphones (semi-smartphone) here since they're often USD $150-$200 unlocked. The HTC tattoo is cheaper, as are a couple others, but for the most part, Android is nearly as premium as iOS here.