They can see the writing on the wall. And Jony Ive long ago hinted at the future of portable devices- the hardware simply will get out of the way so that the content will shine through (or something to that effect). In the not too distant future, and maybe even today, all top tier smartphones are pretty much identical. The differentiator now and especially in the future will be software AND available content. Apple's multi billion dollar gamble is that in the future they'll have the best content- so users will be compelled to buy their devices (which will be required to consume it).