Despite my disdain for iOS 7 (well, a lot of it, not all), the iPad Air is still a compelling product, with not many real challengers in the market (it's size, weight, and aspect-ratio combination actually make it somewhat unique).
Apple will ride this success for a while, especially because in this case they mitigated the small tablet space with the iPad mini.
This is contrary to the iPhone, which I think the one-size-fits-all approach is going to start showing chinks in Apple's armor unless they address it. Sales of larger-screened Android and WinPhone devices attest to there being a market for these; a market that Apple is ignoring completely.
This opens it up for customers like me, who A-B the products side by side, look at the competitor's product and go "whoa, wait a minute, this is nice. I can do that? And this? Sold!"
So, Apple is not going under anytime soon (if at all), but they have allowed their competition to catch up and steal customers away by not playing in a particular space. A wasted opportunity to absolutely DOMINATE.