The hardware is just better. The software that Apple has designed works really well, and makes the hardware shine way better than any other device. I've used Droid 1 2009-2011, Galaxy Nexus 2011-2013. The hardware/software synergy is just much better on the iPhone.
Anything built dual purpose is heavily compromised (win 8). The appeal is that most airports do not have ground transportation. Not even a taxi. You are usually arranging a private party to pick you up, or hoping the one worn out police car the town leaves at the airport for public use is still there. You are correct though, unless they can get the price down, they will not sell in volume.
How often are people flying into airports that don't even have taxis around? Even if you are, will you really save time versus flying a faster pure airplane into a larger airport nearby and then driving a rented car from there?