nokia is number one in the world simply because of the sheer volume of skus they produce. not saying they don't make good phones (I have a 6620) but their brand awareness is entirely different than apples. MOST people (not only the phone geeks) go with whatever has a good deal, features that appeal to them, and looks good. most of these decisions are made ON THE SPOT and without much research. this is not just the US but worldwide. Those huge nokia sales that are racking up are at the store fronts (and online) after a quick breeze through available models. Nokia maintains there leadership not because of brand popularity but because no matter what kind of phone you are looking for nokia makes one to suit those needs.
This is entirely different from Apple where people WANT the ipod. They don't go to the store to make an on the spot decision between different DAPs. They go to the store to by an iPod.
As for who should be fearing whom, IMHO Nokia should be fearing Apple. Apple so far with iPod has a pretty damn sparkling record for a) knowing what the mass public wants, b) releasing solid performing portable hardware, c) make a killer profit on it, and d) probably truly understands convergence the best out of everyone out there. If apple were to really make a phone (not just approve another company to) they would likely destroy their nearest competitors. That brand awreness, that desire to buy the brand would follow them.
And the last comparison is that while Nokia is number 1 in europ and parts of asia (but not japan) and is number 3 in america, etc... apple is number one everywhere. Apple commands 70% of the DAP market and many expect that lead to GROW. Number one in asia. Number one in europe. number one in australia. number one in africa most likely. etc.
I'm not trying to turn this into a pissing contest, and I am hard from a die hard mac head.. but really it should be obvious. Apple knows what they're doing. Unlike nokia with phones, apple has RARELY had a misstep with their DAPs. If they applied that same understanding of the market, their consumers, and the phone industry in general, heaven help all other phone manufacturers.