Exactly. For what the iPhone does do, it does it pretty much better than anyone. This is, of course, subjective.
But the issue is that some people want more, and since Apple is sitting firmly on the "we don't give you what you want; we'll tell you what you get" side of the fence, they leave users like me looking for alternatives.
Google (and Sammy/etc) are sitting on the other side of that fence, going: "You want this? You got it. It may (or may not) be crude-ish, or not as smooth at first, but you got it". "We'll improve on it as we go along".
For me, at least today, Note 3 > iPhone, hands down. Not as smooth, or stable, but I can do more with it. For me, it's worth the trade off. For others, not so much. I see the Note 3 as a pocket computer, vs the iPhone being an appliance. There are pros and cons to both.
One thing is for sure, Android is getting better and better exponentially, so Apple needs to do something. If they gave us a pocket Mac in addition to an appliance (the current iPhone), then, and only then, would they be really taking the fight to Android.