At the same time, I don't see very many iPhone 5s around - I only know one person who has one (though they can be difficult to differentiate from the 4/4S), whereas it seems like everyone has a Galaxy S2 or S3.

The S2 really caught on in Australia due to some very agressive pricing. I'd say I see as many S2/S3s around as iPhones (and probably more than iPhone amongst younger people). They're everywhere.

That being said, there is an additional layer of difficulty when it comes to purchasing apps on Android that iPhone doesn't have - most people had an iPod and one point and have an iTunes store account set up already, possibly with some credit already on it (ITMS gift cards were popular presents for a while). Play store requires you to enter your credit card on a new account, which I suspect is a significant barrier to app purchases for many people, out of caution or laziness.

Also, due to the more technical nature of the Android developer crowd, with the exception of games, there is almost always a free equivalent to paid apps which are as good or almost as good.