I've got a guy at MSFT that's been working on Mango, and he says it will crush iOS. I believe him.
It won't, and if your friend genuinely thinks so then he's as bad as any ****** Apple have ever had the misfortune to pick up (though to be fair to him I suspect he's just towing the company line).
Will Mango be great? Yep. But one OS upgrade is not going to flip things on their head overnight, and there will always be people that one OS suits much better than another. Besides which, WP7 should be gunning for Android - it's the OS with the lower user satisfaction levels and the OS where low-end handsets are terrible so users will be much more tempted to switch. And ice cream sandwich looks like a kludge of an OS upgrade - never a better time to pick up disillusioned users!