In all likelihood both will continue to be part of the mobile ecosystem for some time, or until Google gets tired of throwing money at the problem.
But as I said to another responder, the iPhone is one device on one carrier per country, and Android is many devices on all carriers. They are hardly on equal footing for a purely numerical battle for superiority, but still iPhone is winning.
Google is making real money with Android, and even if it's a loss leader it's just another medium to expand their search business. They can afford to lose the millions in Android develoment and they still come out winning.
What money do you suppose they are making? It's probably cheaper to pay Apple to maintain Google as the default search engine on the phone than to make their own. It's unlikely that a whole lot more internet searches are happening because of Android that wouldn't have happened in any other arrangement of the ecosystem, so I still don't see how Google benefits.
Yes, that's an option. But consider this: the iPhone becomes the number one smartphone out there -> Mobile Safari has the highest mobile marketshare of any web browser -> Apple controls the mobile web. What Google ultimately want is an open web so they keep making money from AdSense/AdWords.
"They are hardly on equal footing for a purely numerical battle for superiority"
Thats Apples choice. Those chose to lock in with AT&T they could have not locked in and sold many MANY more. So yes it equal if anything its less equal for the android because it came in later.
Considering that the Android product options prior to November were pretty weak, the momentum in Android is partially based on decent products finally being available to consumers. Unfortunately, I think Google's N1 distribution strategy isn't helping matters.
Of course I'm not going to declare the iPhone a failure - it's clearly done very well. But I think it's still a little early to call it a winner.