Before Google and after Google there were other competitors to Apple, such as Windows Mobile and WebOS. Also, to be very clear: you seem to be talking about Android, when I was talking about actual physical phones and tablets; right now there are a bunch of people angry that Google is pretty much giving away Nexus devices in an entirely unsustainable fashion. This is a fairly recent development (and would probably be getting more complaints if they didn't immediately run out ;P).
Regardless, your same argument could easily be said about web browsers, and somehow that case happened, so obviously anti-trust actually does work like that, at least in the eyes of the US prosecutors: just like with Internet Explorer, Google has managed to squelch numerous markets where there could have been competitors by being the only player willing to do it good enough for free; for some less obvious examples, think of cases like Google Code, or Google Charts, or even Google Groups (which is still around, but whose only competitor was another free offering from Yahoo! which is largely a laughing stock at this point).
synposis: the antitrust case is at this point ridiculous.
As a formerly poor person who could only afford a G1 and not an iphone, allowing me to rise out of poverty, I'm not angry. The only angry people I know are Apple execs. Consumers are pretty happy about this. Which means the antitrust case is going nowhere.
The Microsoft case was different, Microsoft was found guilty for EOM shenanigans, and Bork, who authored modern antitrust law and thought microsoft was guilty, now thinks there is no antitrust case against Google.
When the FTC is done, they'll be a laughing stock.
If you want to really find a problem, you'll have to look at amazon who is not only selling at cost, they make no profit and have a high P/E since investors think they'll eliminate competition then raise prices.
http://www.engadget.com/2012/11/03/editorial-amazon-and-goog...
Regardless, your same argument could easily be said about web browsers, and somehow that case happened, so obviously anti-trust actually does work like that, at least in the eyes of the US prosecutors: just like with Internet Explorer, Google has managed to squelch numerous markets where there could have been competitors by being the only player willing to do it good enough for free; for some less obvious examples, think of cases like Google Code, or Google Charts, or even Google Groups (which is still around, but whose only competitor was another free offering from Yahoo! which is largely a laughing stock at this point).