It is very similar to the problem they faced against Windows 95 with the macintosh. Microsoft was focusing on building a commodity OS and not worried about the

It is very similar to the problem they faced against Windows 95 with the macintosh. Microsoft was focusing on building a commodity OS and not worried about the hardware while commodity hardware vendors were able to focus on their strengths without having to fuss to much about hardware. Apple, being so vertically integrated will probably lag behind somewhat. Its just way more complex to design end to end, even if the final product is better integrated and more "finished". However, I am not really sure that the Android or Windows Phones are really all that more innovative. Sure they can throw in a 50 core chip and a 15" screen, but in the end there is little real differentiation between phones right now. I think apple should allow for larger screens, as my hands are larger than the average person so I can still use one hand on a Galaxy, for example.(but just barely) This is really everyones "windows 95" problem. The market is pretty mature and at this point there is only room for iterative improvement. In fact many of the latest mobile innovations seem to have frightening privacy and security concerns- mobile payments, NFC, location context are difficult to do well and securely.