I don't think most consumers rationally weigh all the alternatives and then pick the best, especially when what's "best" may be only be a small incremental impr

I don't think most consumers rationally weigh all the alternatives and then pick the best, especially when what's "best" may be only be a small incremental improvement. The iPhone itself was a revolutionary improvement over what existed, but even if the Pre is a better product, it's only slightly so. I'm willing to bet that iPhone users will generally continue to stick with the iPhone because a) they're familiar with it and generally pleased with it, b) they have certain investments in apps/iTunes that won't transfer.