It seems I missed this while I was busy getting jetlagged. Sun are porting their recently acquired SavaJe platform to run on Linux, and building a complete phone platform to be licensed to phone manufacturers. They don't have any licensees yet, and it'll be interesting to see if they'll manage to get anywhere in a field of business where Microsoft have failed quite spectacularly. I guess Sun have a greater chance of getting this platform out there than SavaJe did, with their resources, but at the same time, it's obvious that you can't just throw money at something and expect it to be a hit.
The linked article says that the software will only be distributed in binary form, to keep compatibility between handsets. I'm not sure if phone manufacturers and operators will be too happy about that. With a well designed system, there might be enough hooks in there to make differentiation possible, but there's only so much you can do without the source code. I think one problem with Windows Mobile is that it's so heavily branded as a product in itself. Handset manufacturers and operators want it to look like the whole package is their own product. This might turn into a problem for Sun, and they might have to reconsider the binary distribution model. Compatibility is nice, but I think this is mostly a concern for them, not for their customers or the end users. This is not the desktop or server market, end users aren't interested in compatibility, most of them don't even know that they can install software on their phones.
Again, it's nice to see some new products in this field. We already know that it's a very tough market: S60 and UIQ still don't have many licensees outside of Nokia and Sony/Ericsson. What makes Sun think that they'll succeed? Using a whole new system is a very big decision, as it's a huge effort to get to understand it, train people to work with it etc.
(And finally, the linked article is full of these naive iPhone references we've seen in almost every phone related article in the press since it was announced. Please, stop it already, you're just making yourself look clueless.)