I think it's simply due to people realizing the iphone is not the only smart phone
Early adopters have been buying all manner of smart phones for ages, but it was the iphone that made it mainstream. People (i.e. the vast majority of phone buyers) who had been quite happy with their ever smaller number-pad phones, suddenly found themselves happily coughing up for an iphone, marvelling at 'apps' and banging on to all around them who'd listen.
Gradually more and more people started to realize that maybe they too might want an iphone - and the lo the iphone sold in ridiculous volume and was written about endlessly in the popular media.
Simply the decline in Apple marketshare isn't so much due to people not wanting to buy an iphone, just the iphone has led the majority of people to consider a smart phone and with their heads around that, they're considering the choice the new market offers them.
Cost. an iphone over the length of a contract is expensive. I roughly equivalent Android device can be picked up for significantly less.
Iphone is not the only phone. Couple of years back my better half 'wanted' an iphone. Vodafone didn't carry them. In the end she got a decent discount on her new contract and a very pretty little SE candybar. This time she didn't want an Iphone. She looked at it, but ended up asking me if I was happy with my phone (an N1) and then went and bought one of those. I've had various smart phones (P800, few WinMobs etc) that she's never paid any attention to before.
Iphone is no longer 'exclusive'. From the great big Apple on the back to the white earbuds, the iphone was always a little bit 'look at me'. We've now all seen an iphone. It may still be expensive, but it's no longer an aspirational product now half the school bus queue seems to be waving them about.
Other smart phones caught up. Or more specifically made an effort to not just be about the function.