As someone who already owns a Nexus 4 and a 1st gen Nexus 7 they are already a commodity, I bought my N4 for half what an iPhone 5 costs.
The only thing that keeps Apple even remotely price comparable on the iPhone is that people mostly buy a smart phone on contract so they see roughly the same price per month (but the carrier takes a much bigger cut with Android).
For someone old enough to just remember the 80's and the Mac vs PC wars it's like watching history repeat itself again, the completely backwards commodity platform vs the well engineered but more costly platform except this time Google is in IBM's place and they aren't doing it by accident like IBM did they know exactly what they are doing (look at the nexus line, top of the line hardware, always the newest version of the software and price that hurts other companies using Android, they risk hurting their own suppliers to drive the price of high end hardware down as rapidly as possible) the problem is that the commodity platform gained ground very very quickly and something like the Nexus 4 at 200 quid with Android 4.3 is now the equal of the iPhone 5 at 500 quid.
The next 5 years is going to be fun to watch whichever side of the divide you are on.