Today there are two giants in the smartphone arena: Apple's iOS and Google's Android. The market shares don't tell the full story, because other players with significant market share are in decline.
First, the Android dilemma. In many ways, this is a parallel of Microsoft Windows, which is why many observers are predicting for iOS the same fate as MacOS suffered against Windows. The main difference between Windows and Android is that Google doesn't make the bulk of its money from direct licensing, instead relies on advertising revenue, so it can afford to give away Android to manufacturers.
However, observers should also remember names like Gateway, Compaq, E-Machines, Packard Bell, et cetera, and ultimately IBM itself, which all fell to the wayside. It's hard to compete in a crowded market unless you have something unique to offer, such as Intel's CPU, or Microsoft's Windows OS, which is why these two are the big winners of the bloodbath. This is also why while the Android handset unit sales have overtaken iOS, Apple still takes home the bulk of the profits. If you're Motorola or Samsung or HTC, you know that competing on hardware alone is a race to the bottom, but you don't have the software capability to build something unique and desirable on top of Android. Android giveth, Android taketh away.
The other interesting thing is that Google has delayed the open sourcing of Honeycomb, their tablet-enhanced version of Android, because they admitted to taking shortcuts and don't want it used on the phone form factor. I find that entirely believable, and this may be the first external sign of some strain on developer resources inside Google. It also means that some significant effort will go towards unifying code for the two form factors instead of new features this year, slowing their heretofore breathtaking pace at least somewhat.
Microsoft has now shipped Windows Phone 7 to what appears to be some critical acclaim but lukewarm market success. It's had to pay Nokia US$1 billion to make handsets, which is the reverse kind of relationship that Microsoft would prefer. Nokia wasted years dithering among three or four possible challengers to iPhone, only to realize that none of them would catch up. I'm not hopeful that partnership with Microsoft will change anything. Oh, and I was right about the KIN: it turned out to be a footnote, pulled from the market after just weeks.
RIM bought QNX shortly before I wrote the previous post on this, so I'm a bit surprised I didn't mention it. Since then, RIM has announced plans to ship a tablet called the PlayBook that runs a version of QNX. However, it suffered several apparent schedule and spec changes and feature additions, most recently the inclusion of an Android compatibility mode. The chaotic SDK situation (five separate ways to write PlayBook apps) will make developers leery of committing to the PlayBook, and will diffuse their internal developer resources. While the Blackberry brand may help them sell to the enterprise market, the confused story will probably cost them in the consumer market, doomed perhaps by substandard ports.
Palm hasn't really done anything that is externally visible since the HP purchase. Presumably some time was lost to restructuring and replacing lost employees, but HP has announced that webOS will soon be used in a tablet, phone, and apparently be shipped with new PCs. Unfortunately, nothing will be available before "summer", which is quite a long time away in this market. I still think webOS is dead.
As for the iPad, Apple sold nearly 15 million of them in 2010, and has just started to ship iPad 2 to apparently warm reception. Earlier it also started shipping a CDMA version of the iPhone for Verizon to what seems to be disappointing demand according to some reports, although sales figures are not available.
To summarize, this market is still astonishingly vibrant. iOS and Android are now the two giants to contend with, while Microsoft/Nokia, RIM/QNX, and HP/Palm have started to consolidate in a bid for third place. I don't think more than one of these three will ultimately survive, and while the safe money is on Microsoft because of its resources, HP just might pull off something if the slowness back to market is made up for by serious innovation forward.