ZDNet is calling this Browser Wars 2.0 ...
I've been saying that browsers are not (and shouldn't be thought of) as a site for strategic competition. But it looks as though I may be wrong on this one.
All web-applications want to be runable on all browsers ... anything else is just suicide. And all browsers want to be able to run all applications ... and so ...
But I underestimated the part about a better experience for the users which isn't related to the browser content. Browser features such as speed, privacy, off-line caching, new UIs such as Enso-like "ubiquity". All the browser makers have demonstrated that they can create some excitement in these areas.
Also, what's becoming clearer is that "privacy modes" can disrupt the kind of cookie tracking which allows, say Google, to serve relevant adverts, which makes browser innovation in this area a direct attack on Google's revenue. (And so also makes us realize how much of an interest Google have here.)
So, I think I was still right about standards in web content (at least for the moment). But as the browser really starts to replace the desktop operating system it takes over a whole lot of other responsibilities as well. And there's clearly some room for differentiation there.