You don't have to be a huge threat to be worth squeezing money out of. Huge threat? I don't think so.

Samsung is the only other player making any real profit in the industry, so they are definitely Apple's largest competition at this point. Unless MS does something crazy with Windows Phone 8. They're important.

But I don't agree with huge threat. At this point, Apple may be able to take a year off from releasing a new iPhone (despite not having true 4G) and not suffer significantly in the long term. It's not a good idea, but I bet they could.