The Lumias are a great statement about the importance of hardware. I’ve been an Apple guy for a long time, and have has an iPhone since gen1… but seeing Cam use his Lumia everyday has definitely tempted me to switch… and Microsoft makes the switch from Apple to Windows Phone as easy as they can.
Once all of the OS UX levels plateaus, hardware again becomes the differentiator.
Watches are an interesting analogy. At one time the precision of the engineering meant everything. Swiss made, quarts movement, auto-wind… once inexpensive Japanese , then Korean, and finally now Chinese movements approximated the accuracy and precision of European movements, the only differentiators left were price, style, brand, and prestige. Of course many of those European brands were able to take the mechanical expertise and convert it into brand strength and prestige, which you could say is what Apple is trying to do (gold baby, gold).