The Linux Mobile Foundation, or LiMo, has been trying to create an open-source platform for device manufacturers, carriers, third-party application developers and others in the mobile industry since last year. By using the open source Linux operating system, companies across segments of the mobile industry will have lower technical and cost barriers to mobile operating system innovation, the effort hopes.

Today, LiMo has gotten a big boost, maybe: Eight new member organizations have joined, including the largest US carrier, Verizon, and Firefox browser creator, Mozilla.

LiMo goes to great pains to bring everybody under its tent. Its members provide intellectual property to its “middleware” platform — the operating system of a phone, rather than its applications and content. See screenshot for a diagram of the components that LiMo works in (in green); LiMo background information PDF here.

At its core, LiMo seems to be pitting carriers like new LiMo member Verizon against the Google-led Android effort, even though they’re not quite the same thing — both Google and incumbent carriers hope to maintain some control over operating systems on their phones, so they can promote their own ads and applications.

LiMo, for example, will allow carriers like Verizon to cut the cost of putting together an operating system. It lets carriers customize their own user interfaces for the LiMo operating system, as Linux Watch points out, which is a way for these companies to introduce applications that they can control and make money from.

The closest rival here is the Open Handset Alliance, or OHA, led by Google, that is implementing the Google-developed Android operating system — based on a different distribution of Linux. In contrast to LiMo, Android has its own user interface. Through this interface, Google will give preference to its own ads and applications like Gmail and Google Maps, as well as partner third-party applications.

Mobile Linux is arriving, but for whom?

Mobile Linux operating systems has until recently been viewed skeptically with the mobile industry. They haven’t gained much traction among more expensive and complex “smartphones.”

But the competition to be more open, spurred by Android, has forced carriers like Verizon to look at ways of giving developers more control. The catch is that everything still being developed. There are only a few LiMo-enabled phones out now (like the Motorola U9, pictured, via Linux Devices), and the first Android phone won’t be out until later this year.

Long-term, though, mid to high-range Linux-based phones are expected to reach twenty percent worldwide market share by 2013, according to one study. Meanwhile, the other competitors have grown large. Apple is seeing surging purchases of its iPhone, which runs on its own operating system — a study from last fall says the iPhone has already gained 27 percent of the smartphone market in the U.S.

And, of course, the largest hardware manufacturer in the world, Nokia, already has its own operating system, Symbian. Microsoft’s mobile version of Windows has also already become popular on high-end “smartphones” that allow better web access. LiMo hopes to be a cheaper, jointly-controlled alternative.

Where does all this talk of open efforts leave third-party developers? First of all, it will ultimately create new ways to build applications that run on one operating system across many types of phones, on carriers around the world. That’s also one downside for LiMo — partners are able to customize their implementations of it, which means an application may need extensive re-working to function across carriers.

Android, because it is run by Google, promises a more seamless operating system, user interface and other features for third parties to build applications. This leads some Android advocates to believe that its OS will achieve dominance.

Verizon, at least, seems to be thinking about the possibility of Android’s success. The carrier suggests it will allow Android phones to operate on its service, but that obviously won’t be its focus with LiMo. Here’s the thing. If Android is very successful and LiMo is not, the questions as to why Verizon didn’t simply align with that movement will get very loud. Especially for the company that turned down the iPhone.

Also of note: Mozilla’s participation. The company has already said that it’s coming out with an open source web browser. By joining LiMo, the non-profit organization shows it is looking well beyond its search-revenue partner, Google. Presumably, Mozilla’s mobile web browser will include Google as its default search option just like it does on the web — and on LiMo-based operating systems.

So far, LiMo has gained 40 members. Besides Verizon and Mozilla, members announced today include Infineon Technologies, Kvaleberg AS, Red Bend Software, Sagem Mobiles, SFR and SK Telecom.

Big companies are trying to promote third-party innovation

Nearly every big company in mobile is offering rewards to promising developers. Venture firm Kleiner Perkins has a $100 million fund for companies that build for the iPhone. Smartphone Blackberry maker Research In Motion has just joined together with Thomson Financial and other investors,
tting $150 million total
towards companies that build for the Blackberry.

LiMo, meanwhile, says it will reward promising developers with “special access and support,” according to Forbes, with its winners being announced in September.

Android is leading the charge here by being first (although not in the funding it provides). Yesterday, it announced its 50 winning application companies from among the more than 1,700 applicants. The winners will receive seed-funding portions of a $10 million total fund. Not all of them have launched. For a list with links to the company names, see here; for some more in-depth reviews, see here.