I can easily see it beating Android/iPhone (or at least competing). I can't wait to get my hands on such a phone and I'll definitely be making apps for it. I think a lot of developers are like myself since 1) it's all JavaScript/HTML5 which is cool and 2) it's by Mozilla and company. Once there are a bunch of apps the people will come, unless the mobile industry decides to make this fail or Firefox OS turns out to be terrible.

Also I think people miss, this isn't just a phone full of webapps, it's about opening up the native functionality of the phone to JavaScript. So operating the camera, accelerometer, contacts list API, etc.