What Steve Jobs Fears Most

Blaise Zerega wants reliable mobile service: Yesterday, Steve Jobs' announcement of a souped-up and priced-down iPhone says a lot about what keeps him up at night. In the year ahead, Android phones will come online, and LiMo phones may ultimately be the must-have devices. There's a no-holds barred price war looming and Apple is especially vulnerable if the software used by its competitors is free. The $199 iPhone is a pre-emptive attack aimed at establishing a larger market share for the nasty times ahead.

Consumers will be the obvious winners -- more choice, more features, and lower prices. And as much as Android seems to be the media darling, there's a strong argument in favor of LiMo. GigaOm cited a report about the growth of mobile Linux operating systems, which said more than 30-percent of smartphones will be Linux-based by 2012.

 And just a few weeks ago, Verizon announced that it was  supporting LiMo, joining more than 40 other companies like Motorola, Samsung, Vodafone, and SK Telecom. Android, which is backed by the Open Handset Alliance, has the support of T-Mobile, NTT DoCoMo, China Telecom, Telefonica, and of course, Google.

Then there are some very smart venture capitalists. I spoke recently with Terry Garnett, from Garnett & Helfrich about his company's investment in Azingo,a mobile linux software maker and member of LiMo.  He's not intimidated by Google's very public support of Android, suggesting that handset operating systems may not be a core business interest for a search company. "In the end, Google's role may be that of catalyst, the company that helped open up handsets." Garnett, as you might expect is bullish on Azingo. "There needs to be a Red Hat for the mobile market."

I also checked in with Chris Hollenbeck and Standish O'Grady of Granite Ventures. The firm is active in communications and software and the pair were bullish on LiMo, with O'Grady citing "huge interest from ODMs (original device manufacturers) in Asia."  O'Grady has a board seat at mobile software maker Wind River, a nice perch to watch the proliferation of new devices. In short, they predicted that the combination of LiMo software and enthusiasm from top contract manufacturers would produce fantastic, low-priced new phones.

So, the question for 2009: what will be roles of Apple, Android, and LiMo in the coming phone wars?