One area where AMOLED is far superior to LCD is when you're using the device in the dark. Since there is no backlight, blacks are jet black with no light bleed. This is fantastic if you use your phone as a bedside clock: the iPhone lights up the room even if you have it set to the lowest brightness setting, whereas an AMOLED screen will just have the numbers illuminated. Conversely, AMOLED is absolutely terrible in daylight and almost unreadable in bright sunshine
If I was given the choice between the current resolution iPhone screen or a lower resolution AMOLED, I'd go with the current screen: The extra resolution brings clarity that is useful all the time, not just under specific circumstances
Of course, the ideal would be an AMOLED with improved daylight readability at retina resolution
Another issue is mass production: HTC moved from AMOLED to LCD on their Desire phones due to issues with screen production quantities not meeting demand, and they sell a lot less of those than Apple sell of the iPhone: Until the huge demand the iPhone generates can be met, Apple will stick with LCD
If I was given the choice between the current resolution iPhone screen or a lower resolution AMOLED, I'd go with the current screen: The extra resolution brings clarity that is useful all the time, not just under specific circumstances
Of course, the ideal would be an AMOLED with improved daylight readability at retina resolution
Another issue is mass production: HTC moved from AMOLED to LCD on their Desire phones due to issues with screen production quantities not meeting demand, and they sell a lot less of those than Apple sell of the iPhone: Until the huge demand the iPhone generates can be met, Apple will stick with LCD