I think something you have to take into account is that a lot of people are simply buying these android smartphones because they either can't afford the iPhone or their carrier doesn't sell it.
Also regarding the price of Android tablets, none of them seem to be able to challenge Apple's $499 price point. I'd love to be proven wrong but it seems like for whatever reason—likely their ability to get extremely cheap components—Apple will be ahead for a while yet.
You're only thinking of the good ones (and for the record, I love my xoom). You can get crap ones starting at $99.
On the iPad level, Samsung's coming in hard with equal pricing ($499 16gb/wifi) and at-least-as sexy hardware. I think they're likely willing to take a hit on profit to get market share.
Also Apple has many retail stores of it’s own to sell the iPad to those that are curious enough. Other tablet manufactures will have to fight it out for retail space with other competitors.
Also regarding the price of Android tablets, none of them seem to be able to challenge Apple's $499 price point. I'd love to be proven wrong but it seems like for whatever reason—likely their ability to get extremely cheap components—Apple will be ahead for a while yet.