iPhone 4S and the ipad 3 probably will be the last time that Apple convincingly has a lead over android. Especially with smartphones showing up on prepaid networks, the cost difference will be noticeable. My brother for instance got a smartphone on Virgin mobile. The android phone was like $300 cheaper than the iPhone.
Macbook air was revolutionary, but again, where do you go from there? You can't really go any thinner, and windows ultrabooks are now convincingly cheaper + better lcd screens.
The prototypes for the iphone 5 look kinda lackluster so far. And the redesigned dock connector might actually be a big enough deal to turn people off of the typical apple upgrade cycle.
Also, it seems like since Steve passed away, leaks have gotten worse and worse for apple.
The thing with Android phone is that... it's a huge beta test. I have followed it since 1.5... and now I'm on 4.1, and it's still a huge beta test.
Now with Flash gone, the Android browser (that's all of them) actually got worse (a lot worse) in utility than Mobile Safari... For instance, I can navigate to
http://www.engadget.com on my iPad and watch any video clip on there, but on my Nexus 7, I can't watch anything because... there is no Flash!
It's really a "you get what you pay for" situation there with regard to Android.
Also from another perspective, you can also say that Apple can thrive to reduce the prices of their products next, or introduce new products to fill in pricing tiers that are still vacant. I think a $299 iPad Mini is a good logical next step.
As for whether we can go thinner with hardware, well, that's up to whether Apple can engineer it, but I can assure you... laptops right now can still go much, much, much thinner. Until you see a 0.25" thin MacBook Air, there is still room for improvement.
Windows Ultrabooks are convincingly cheaper? I don't think so. I think the more likely statement is that they are convincingly higher spec'ed than MacBook Air counterparts. But then you are not guaranteed the same user experience on the MacBook Air. For instance, I wouldn't trade the ability to switch back and forth between Windows 7 and OS X instantly with... just Windows 7.