A few reasons why Android is beating iPhone:
1)Android has always been, and always will be, on tons of cell carriers. Apple? Not until their 4th "generation" of their phone (5 years I think) has Apple allowed other carriers other than AT&T. Oh, and right now it's still just ATT and Verizon. Thus millions of consumers have been able to buy the Android on their current/favorite cell carrier.
2)Android phones come from various manufacturers with different pricepoints and different designs. Apple is Apple. I'm not complaining, I'm just stating the fact that there are more choices again for potential Android customers at the phone level.
3)Although I love my 3GS, I've seen a few family members (who actually WANTED the iPhone but Verizon simply didn't have it so they got the Android) with Androids and I have to say it's pretty darn good.
4)AntennaGate...whether you believe it or not...was the talk of the world for several months in 2010...bad PR on many levels for Apple when the Android was making its debut. Apple's crappy response after response made Apple look like Scrooge. Apple gives away $0.89 "bumpers" to limited users for a limited time and that, in Apple's eyes, makes everything good. What a joke...and nobody was laughing.
5)iPhone 5...nobody knows when but best reports are Sep 2011 (5 months from now)...I think many people with an iPhone 3GS or non-smartphone who want a smartphone don't want to buy a last year's full-price iPhone 4 right now WHILE THEY MAY POSSIBLY HAVE TO CHOOSE a new phone/contract and are opting to try Android. My ATT contract expires in Sep this year and I have to say, I ain't waiting later than Thanksgiving for the iPhone 5...a)I want off ATT and b)There will be plenty of Androids out in Thanksgiving that will blow away my iPhone 3GS.
Again, overall I love my iPhone 3GS. I think the 4 has much better camera/video quality and Facetime but that's really it. Hopefully iPhone 5 will have a much sweeter camera, some major iOS enhancements (features), and larger storage for the phones (32GB min, 64GB) WHILE COSTING LESS.