Apple has taken a huge lead in the smartphone race with its killer UI and over 75000+ apps on iTunes. Even though Apple has kept the iPhone hardware away from extreme features, the competition still can't go for the kill. Almost every deserving smartphone that comes close to beating the iPhone in its own game gets shot down by the App Store advantage that Apple has.
Recently, competitors have tried to counter the iPhone's charm with a strategy where they promote live widgets. The two companies doing this very clearly are Nokia (with the N97) and Motorola (with the Cliq). While The N97 bombed with a horrible touch experience (amongst other reasons) the Motorola Cliq has failed to excite anyone and has yet to see the light of day.
Beating the iPhone in the specs sheet with a better camera, flash, physical qwerty keyboard, memory card support, etc. is easy. However the real question is, will the strategy to synchronize social media updates or bring live Internet widgets be enough to take on the App Store? Certainly not! Cluttering the UI with Internet tools in an age where most parts of the world lack high speed Internet and expensive data plans is something consumers ideally like to avoid; making the UI so Internet-dependent isn't a great move.
Though debatable, by far the best iPhone competitor in the market today is the Palm Pre. Even though it provides a better mobile experience in many ways, one of they key areas where it is left behind by the iPhone is the App Store. iPhone has transformed itself into a great gaming device, Internet tablet, business tool, and media center apart from being a phone. Shouting, "Developers, developers, developers!" on the stage won't really help the competitors; they need to get their strategy right and facilitate the right platform for developers to work on.