I didn't mean to say deal making was the biggest reason, just a big reason for Microsoft's success. As someone else pointed out in this thread, while Microsoft did indeed supply the hardware makers with an OS, they very quickly made sure it was the only OS those hardware makers would be able to sell. Also, my understanding is that the Mac OS was let stagnate in the 90's and that most people actually thought Windows was a superior choice anyway.

Is it really the case that Android is the only option at this point for hardware makers who are not Apple? That seems silly to me. The other choice is to compete with Apple by building the whole stack. My worry is that Palm's apparent failure is going to put the rest of the industry off of the idea. It doesn't seem ridiculous to me for a company like HTC or Motorola to either buy Palm or start from scratch on their own OS so that they actually have something to sell their product with instead of just selling yet another android touchscreen device. Is that not an option?

Microsoft was able to make sure that they were the only OS mainly because of hardware makers' tendency to accept the solution that everyone else was going with. If your main competitor offers a Windows stack, why risk going with something else? I do agree with you to the extent that it all started with their landmark IBM deal. In today's landscape, why would HTC or Motorola or some other hardware maker risk developing their own stack and maintaining it when everyone else seems to be offering Android? I think its more about minimising risk than innovation. Who wants another OS/2 on their hands?

Who indeed? OS/2 is a prime example of what can happen to a hardware company that puts its destiny in the hands of another. IBM got screwed by Microsoft when they pulled out of OS/2. If IBM had their own OS independent of Microsoft, they wouldn't necessarily have had the same problem. Also, the HUGE difference between now and then is that today we have the internet. Incompatibility was a huge problem back then because if you had two people with different OS's, you couldn't share anything, let alone run the same programs. With the web as an intermediary, we have a much better way to share information than we did back then.

Ex: Even if the same app doesn't run on two different OS's, they can both still talk to twitter. Back in the day, if you both didn't have a copy of Word, (and floppy drives) you couldn't share data.

Also, re: why would anyone want to do this, my answer to that is that if they have something different from everyone else who is competing on who can sell the cheapest Android phone, they would have something to sell.

It strikes me that the problem PC hardware vendors have is their own short sightedness in supporting only one supplier of chips, operating systems etc. It took a long while for their margins to shrink.

Maybe the smarter play is to produce high quality, good value Symbian, Android and Windows Mobile phones that address the market.