That's begging the question; since Android is not a serious competitor to the iPhone, the fact that Android is doing so well is therefore proof that Android is not a serious competitor to the iPhone. You neglected to spell out that first clause but your statement is clearly based on that.
I'd suggest the much more plausible line of logic, along with being logically sound, is that as Android is now outselling the iPhone, the Android is a serious competitor to the iPhone. Pretty much by definition of "serious competitor". Will you still be dismissing it as "not a serious competitor" when Android outsells the iPhone by a factor of two? Because I rather expect it to only be a matter of time.
The Android phones are currently outselling the iPhone by a factor of between 3 and 4 in the US. This current stat is marketshare, so includes the last year or so when Android was selling much less than Apple, they were equally matched in sales last August. It's probably selling twice as many globally, it was 150% at the end of last year but growing rapidly compared with Apple being just above flat.
Several single phones are already outselling iPhone 3GS in the U.S., and single company smartphone lines by Samsung and HTC are roughly on par with the total sales of Apple phones and look set to overtake them soon. Whether the Samsung Galaxy family will overtake the iPhone family mostly comes down to whether you feel that a Verizon iPhone, or an AT&T 3GS, or Tim Cook's rumoured cheap/small iPhone nano is still an "iPhone" and how far you'll extend the same logic for the various Galaxy S phones. (Though more directly, in some European countries a single Galaxy S model outsold the iPhone 4)
Eh, that's not really what I said/meant. The fact that Apple's only serious competitor is something open-source and freely distributed, shows how other proprietary operating systems have been blown away by iOS (and Android).
First off, like many Android fans, you insist on comparing an operating system to a single phone. It would be a shock if a free OS on multiple phones didn't outsell a single phone. However, the word "outsell" is a weird one, because Android doesn't cost anything, so it's not Android that's outselling anything--it's the total sum of the multiple phones that just happen to run Android compared to the one phone that runs iOS. Almost all of Android's market share gains came at RIM's expense, not Apple's.
Android is not a serious competitor for Apple because it's not making Google money. It has a negligible app presence and a fragmentation problem. iOS is still what guides the industry, it's what people talk about, it's what Android is copying (Android was going to look totally different before the iPhone came out in 2007), and it's where the developers are.
It took an operating system with no price tag and the promise of total control for the carriers to outsell a single phone. That's a big deal. Even then, not one single Android handset outsells the iPhone on its own, and the iPad still has no legitimate competitors.
More importantly, Apple make huge profits on iOS devices. It has the developers, and it gets the press attention. Android makes no money for Google, barely has developers, and is known as the geeky platform for cross-armed OSS evangelists who hate Apple. It's also experiencing a non-trivial rise in malware--two negative articles came out today in major news outlets. Sorry, but Android is not a serious competitor for Apple.
The post above is exactly why I left Hacker News. The level of discourse here has descending to the prattle that you read in the Engadget comments. Yes, everyone here has read all of the talking points (boring, boring, really old talking points). Many phones versus a few. Many makers. Profit margin.
I'd suggest the much more plausible line of logic, along with being logically sound, is that as Android is now outselling the iPhone, the Android is a serious competitor to the iPhone. Pretty much by definition of "serious competitor". Will you still be dismissing it as "not a serious competitor" when Android outsells the iPhone by a factor of two? Because I rather expect it to only be a matter of time.