Probably one of the most talked about events at Mobile World Congress this year were the new entrants in the Operating System (OS) landscape. In particular, Mozilla made a big splash with its press event Sunday night. The company announced 17 carriers were now on board to support the Mozilla organization’s Firefox OS. The company also announced that ZTE, LG and TCL would make Firefox OS phones, and later in the week Sony announced they would do so as well.

So what was really new here? First, the carrier interest was noteworthy. Mozilla had 17 carriers sign on, and these were notable for their size. Telefonica and Deutsche Telekom had been long-time supporters, and they were joined by other majors like Sprint, China Unicom, SingTel and Etisalat. Carrier support matters because they remain the largest buyers and marketers of phones, even in regions with large prepaid subscriber bases and healthy open market phone sales. Having a large showing like this gives real credence to Firefox’s potential.

On the handset side, ZTE had been a long-time proponent of Firefox OS. They are now one of the largest handset makers by unit shipments, so their vote matters a lot. TCL (under the Alcatel brand) and LG solid Tier 2 players. For some reason, Sony did not join everyone else on stage, but instead slipped out an announcement on Tuesday that they would participate as well. Mozilla was keen to point out Sony’s participation, but really they had us convinced with ZTE. The addition of Sony does demonstrate that Firefox should work for high-end phones, not just the entry-level smartphones for emerging market which have so far been mentioned as the main target for Firefox.

This all matters because the carriers seem desperate to find a new partner to work with. Most carriers are struggling under the weight of Apple’s dominance of the iOS ecosystem and very healthy subsidies. Android, on the other hand, is seen as little better with Google and all their over-the-top ambitions viewed cautiously by carriers.  With neither Blackberry nor Microsoft exhibiting at the show (and still being big question marks in the marketplace), Firefox captured the spotlight as the carriers’ best-seeming “third choice”.  Mozilla also seem less threatening in that their objectives are far narrower. Mozilla makes browsers, and an HTML phone is essentially just that, a browser. Mozilla does not provide alternative messaging systems or demand fat subsidies like Apple, and they do not run their own Wi-Fi and optical networks like Google. Mozilla’s status as a non-profit organization probably helps as well.

Firefox has a lot going for it. It is based on web tools like HTML5 and CSS. These are easy to design for, with large developer and designer bases all over the world. Mozilla has also solved many of the technical problems associated with web tools as OS. Notably, past implementations of HTML have resulted in performance lags, with web apps often running much slower than ‘native’ apps written for Android or iOS. We believe Firefox has closed much of this gap, especially for the key constituency of game developers who typically demand the most from their OS platforms.

So far, so good. Developers. Handset makers. Carriers.

Now the gritty details.

First, carrier support is a mixed blessing. It costs a carrier very little to issue a press release and participate in an event. Our checks indicate that only three carriers have made hard commitments to ship Firefox phones when they are available later this year. The other 14 are going to wait and see.  Some of them will probably come around, but the distinction is worth noting. Moreover, carriers are fickle. Their history shows they are willing to stick with something new for six to twelve months. Beyond that, a new OS needs to stand on its own without heavy carrier marketing. Counting on carriers beyond that has always proven to be a problem.

Second, Firefox still has to contend with conflicting interest among its partners. In particular, the carriers are going to want to impose their own tweaks to the Firefox phones in their markets. Some will want to install their own apps and walled gardens. None of them really want to see developers launch more apps that eat into their core voice and messaging services. Web-tools-based phones will potentially be able to incorporate voice features like webRTC that entirely eliminate the need for voice plans.

Finally, the actual demand for these devices remains an open question. The original target for Firefox phones was as an entry-level smart phone in emerging markets.  We think most of the initial volume will go to markets in Latin America and Eastern Europe. However, these markets are already seeing considerable penetration from Android smartphones. We saw Android phones at the show which could retail for $40 unsubsidized.

This is the problem that all the alternative OSs face. The Android installed base is already around 400 million, iOS is probably around 300 million. (We are currently updating our installed base models, but these number are pretty close, keep an eye out for that update in a future note.) Neither shows much sign of slowing down, so catching up from zero is going to be a hard race.

Our sense, and one we heard from many other people, was that Firefox had overnight come from a science project to something that merited real attention. Before the show, we would have given a very low probability of success to Firefox OS amounting to much. After the show, that probability went up to something more meaningful.

Finally, a brief word on the other two new operating systems. The leading Linux implementation provider Canonical was demo’ing its new Ubuntu Mobile OS.  Unlike Firefox, this has a new user interface (UI) that is visibly different from Android and iOS. Given Ubuntu’s roots, it should not be surprising that Canonical was also highlighting the mobile version’s clever synchronization with desktop environments.  So Ubuntu looks interesting, but it is far behind even Firefox  in commercialization. The company has not yet announced any silicon or hardware partners yet. So at this stage there is no way to even guess at its commercial potential.

The other entrant in the space is the Sailfish OS from privately-held Jolla. This is the descendant of Nokia’s MeeGo (aka Maemo) operating system. Nokia jettisoned it when they went all in with Windows Phone. Full disclosure, we spent very little time looking at Sailfish. It seems to have some interesting features, and a good pedigree of smart people from Nokia. Nonetheless, their position is similar to that of Ubuntu in that there are no clear hardware partners involved yet.

In summary, Firefox merits further attention. They have a tough path ahead of them, but have so far executed well.  Yet despite all this activity, the market remains Android and Apple’s for the foreseeable future.