In addition to hardware capabilities and responsiveness mentioned by others, the performance data (CPU usage, memory usage, battery usage, etc) of a real device will be vastly different than the emulated version. In addition, emulators typically do not run manufacturer or carrier ROMs, meaning that the behavior on the emulator often differs from the actual device.
For testing initial layouts or on-the-fly development, emulators are fine because they offer instant local access (After the setup, of course, but who cares now that x86 emulators are so fast). For complete testing real devices are a must. That's traditionally been expensive, but there are solutions to that, such as the company I founded, AppThwack, and our competitors like TestDroid. Test locally on emulators, and test periodically on real consumer devices.
There's a reason nearly every development shop has a cupboard full of devices, and it's not because they couldn't figure out how to get a few emulators running.
For testing initial layouts or on-the-fly development, emulators are fine because they offer instant local access (After the setup, of course, but who cares now that x86 emulators are so fast). For complete testing real devices are a must. That's traditionally been expensive, but there are solutions to that, such as the company I founded, AppThwack, and our competitors like TestDroid. Test locally on emulators, and test periodically on real consumer devices.
There's a reason nearly every development shop has a cupboard full of devices, and it's not because they couldn't figure out how to get a few emulators running.