And this was bound to happen. Apple have two product lines, with two release schedules. With a historical 12-15 month gap between generations it wouldn't take long for the competition to jump ahead of them with the latest technology.
With phones you have 3 or 4 main players with perhaps 3 or 4 release dates throughout the year, all trying to usurp the other with their flagship handsets. Handsets tend to be updated ever 9-12 months. Although it seems that flagship handsets are closer to Apples 12-15 months these days.
The tablet market is even wilder, as you have both phone manufacturers and PC/laptop manufacturers in the game. Lenovo, Toshiba, ASUS and Samsung all have interesting things out or in the pipeline at the moment. Apple will have to work hard to keep up with this, although I actually think thats about all they need to do these days. They have a truely massive user base that is incredibly loyal and tied in far more deeply to the iTunes ecosystem than they probably realise.