That explains Apple's share of the iPod and iPod Touch markets perfectly.
Snark aside, most consumers don't know software and hardware well enough to understand who has a superior product. They know that they click on the blue E to get to the internet. That's it.
I'd argue that most people know that an iPhone or iPad will buy them the best experience currently available in their respective markets.
But they also know the figure on their weekly paycheck. And as the difference in user experience between iPhone/Android is narrowing, many[1] seem opt for second-best at half the price.