Notice that in my OP, I said "take any significant chunk of _profit_". I'm not as concerned about marketshare as I am about profit. Yes, Android devices are outselling iPhones, but they are generating considerably less profit.
I don't know the latest figures, but iPhones relatively small market share accounted for over 50% of profits last time I saw. Amazon might sell a lot of cheap tablets, but that won't hurt Apple's profits.
Apple don't have a relatively small market share in smartphones. Asymco likes to quote the mobile phone, not the smartphone numbers to make this stat sound more impressive than it is.
If you do that then it's something like 4% of unit sales share giving 50% of profit. If you exclude people selling millions of throwaway cellphones for pennies and only include HTC, RIM and the smartphone parts of Nokia, Samsung etc. then the profit they make (while still better than the industry average, thanks to RIM and Nokia pulling it down) is much more closely tied to market share and therefore seems much more under threat as Android advances on that front.
I don't know the latest figures, but iPhones relatively small market share accounted for over 50% of profits last time I saw. Amazon might sell a lot of cheap tablets, but that won't hurt Apple's profits.