The Windows monopoly was entrenched when the market was a fraction of a fraction what it was today: That's the whole essence of a monopoly -- it is self-sustaining.
While Android has made a lot of gains, there are still a lot of networked usages where you are left out if you don't get on the iOS train, whether it's a compelling platform itself or not. I'm going to grab my wife an iPod Touch purely so she can play a WeDoodle game, because that's what every other person on a mommy group plays. My bank released an iPhone application -- promoting it heavily -- after having never released a rich-client application for any platform ever, including when Windows had some 99% of the market.
That's the essence of a monopoly. When your choice is very heavily driven by the network effect of the product. Today it is much, much weaker than it was a year or two ago, but it is still in effect.
While the iPhone's very competitive, and while it has a near monopoly in terms of media popularity - I've seen many iPhones in movies, and no Droid - it by no means came remotely close to a monopoly
Well clearly it isn't now. Android has fractured that nascent monopoly (though many in the Apple cheerleading camp are now proclaiming that with the Verizon phone you no longer need to worry about developing for other platforms -- those suckers have an option of iOS devices on two carriers now. Problem?). Which is why I said that it was close. Two years ago the iPhone was the only smartphone that mattered. Even one year ago there was a strong argument made on places like here that the iPhone was all that really mattered.
And the reality is that if Google didn't have an enormous pile of cash to burn on this project, and they didn't have the "enemy of few" status to actually get the partnerships that mattered, today the iPhone would be the only valid smartphone choice.