The problem WP7 had was that there just wasn't good hardware. This is finally changing, so hopefully that hurdle is removed. The Lumia 920 kicks the retina out of the iPhone 5 in almost every aspect other than size/weight and raw performance. Everything else is better (based on what specs we know and the few hands-on reviews we have seen so far: display, camera, sound recording, battery life, NFC, etc). Now it's funny to see people suddenly saying specs no longer matter when somehow it mattered a lot previously.
Of course there is the big issue of how overhyped the iPhone is, and no matter how little the improvement is over the previous version, people will line up.