i don't know about you, but the functionality and performance of the hardware matter to me, not just the fashion statement.
higher res / higher quality display.
longer battery life.
port configurations (HDMI, SD card).
durability / waterproofing.
there's a list of some really very obvious ways that companies can differentiate based on hardware. i'm guessing if i could come up with that list, a hardware engineer could increase that by 100x.
don't believe it? look what samsung did with the galaxy note. ALL they did was make a phone w/ a really big screen, which was something no one else was doing at the time.