For just one tiny example, consider web browsers—iOS doesn’t even allow browser engines aside than WebKit. Now compare this situation with that of desktop operating systems, which are still not a super competitive market by any means, but where the fact that Windows users could install browsers other than IE meant that web browsers became a competitive market, leading directly to the increasing capabilities of web apps, leading in turn to the possibility of Google’s office products even existing, making office software more competitive, and that in turn making Chromebooks feasible, which leads all the way back to making desktop operating systems more competitive.

You can’t consider the effects of tweaking one number and conclude that a market would be changed/unchanged by competition—these sorts of things are extremely interdependent.