I'd think their superior phones are the primary reason they are such a huge competitive threat.

It feels weird to me to even say that but it's true. I played around with my boss's new iPhone 5 on Friday and was pretty surprised that it seems nearly featureless aside from power. The features are in the power, in the fact that they give the software (90% of this is relevant to gaming) more capability. This is the ultimate upgrade to whatever existed, but if I was hardware-naive and I saw an iPhone 5 and a Galaxy S3 side by side, I'd think the iPhone 5 must have come out a year earlier for all the features it lacks.

This is the year I stopped telling people "iPhone" when they ask me what smartphone they should get, and Samsung's line is probably the biggest reason why.