Hardware is cake, really. And when you're guaranteed to push as many units as Apple, you can get interesting things made for you (such as your own SoC, higher resolution displays, etc.) And within a few months we'll probably see other vendors come out with similar screens, as volume goes up.

All of Apple's "magic" is in the software. All of it. And that's what has allowed them to clean the clock of every other smartphone manufacturer in the US market for the past 3 years. They -get- software. They -get- user-experience. And as a result they got all the users who had ignored windows mobile, blackberry, and palmos previously.