I think the biggest battles in the smartphone market are yet to come.

I have an iPhone 3GS and I love it, and while the iPhone is considered the best smartphone yet I see multiple problems with it ...

     - piss-poor battery life ... yes, I recharge it at night but there are days 
       when I forget about it ... the other Symbian-based smartphone I have 
       can last for 3 days - basically I'm not using the iPhone as a phone 
       (too unreliable)

    - no replaceable battery

    - the UI paradigm is lacking in areas Microsoft / WebOS / Android seem 
      to address ... those app icons are taking valuable screen estate without 
      much usefulness 

    - valuable applications aren't properly integrated with iOS ... I have the    
      following apps: Skype, YMessenger, Twitter and Facebook; and none 
      of them are saving contact info in my iPhone's contacts. This is one area 
      Windows Mobile 7 seems to be addressing

    - the notifications are really fucking disruptive ... it 
      interrupted my TowerMadness game multiple times :)

    - for developers you need OS X / Xcode for development, 
      and this can be a PITA. WinMo7 probably has the best developer tools 
      available.

    - iOS has Game Center, but Microsoft has the XBox console market and 
      XBox Live upcoming in WinMo 7. Depending on their implementation, 
      the XBox Live integration can be groundbreaking.

    - WinMo7 will probably have the best Office integration you can get on a 
      smartphone. 

And I don't own an Android phone, but I see lots of fragmentation problems and poor management of the marketplace.

Bottom line being: lots of areas where iOS / Android could be improved, lots of room left for competition.

Don't count on Microsoft / Nokia being dead, yes big corporations are rigid and have a hard time changing directions, but they still have lots of resources, lots of talent and the duty to reinvent themselves when the shit hits the fan.