1. A technical sense: Canonical has a significant amount of distribution-specific software that has very little adoption outside of the Ubuntu ecosystem. Examples include:
* their own version control system, bzr (which I think has now been essentially abandoned in terms of development, and other than a few GNU projects never saw much uptake at all);
* their own desktop shell, Unity, which to the best of my knowledge has never been properly packaged for any non-Ubuntu distribution; their own display server, Mir, whose development is the subject of much controversy, and which has been rejected for well-founded technical reasons that have probably already been discussed at length on HN;
* their own init system, Upstart, which was initially adopted by other distributions, who then abandoned it in favour of systemd due to its fundamentally flawed design (for instance, there is no way to 100% reliably keep track of a process's children and the dependency resolution runs backwards, meaning that some configurations can cause hangs).
2. A social sense: Canonical's relationship with the rest of the Linux ecosystem has soured (beginning, in my opinion, around 2009-2010, but as a gradual thing, it's hard to pin down) to the point of outright hostility. In my opinion, most of the responsibility for this lies with Canonical's poor communication with others. There's a very detailed history of some events from 2009-2011 that you can read here [1] detailing their relationship with GNOME.
The culmination this year has been disgraceful personal attacks by Mark Shuttleworth on people who raise technical criticism of Canonical's software. I expect that more will follow whatever the fallout of Debian's systemd decision is.
The two are obviously related. The big problem is that there's (again, in my opinion) very little community appetite for contributing to Canonical's software. And why would there be, given that in order to submit patches for Ubuntu Touch, I need to give Canonical permission to relicence my code under any proprietary licence they choose? At that point, it's not a community contribution, it's just working for Mark Shuttleworth for free.
Does Canonical have the software engineering capability to maintain a bunch of stuff (an init system, a display server) that's really unrelated to their problem (making awesome products for users) and still be able to take on Android at the same time? I don't think so.
[1]: http://bethesignal.org/blog/2011/03/12/relationship-between-...
Unity as an interface is OK ish, apart from the bugs about accelerator keys in LibreOffice and other applications (e.g. Alt-F no longer brings up the file menu).
It's a fair point, but I think that my assessment still holds.
I would quite like a phone that becomes a desktop OS when I dock it. If they can actually pull that one off I think a lot of people might get interested.
Thats an odd statement. It implies that an init system and a display server are not building blocks of an awesome user experience.
For upstart, you have to note that it was Ubuntus contender to write a modern and fast init system when there were far less mature init systems. Its main competitor (systemd) is about 4 years younger that upstart.
Ignoring the whole problem about wayland, the display server is a central part for providing the user interface. So how is writing a new display server "unrelated" to providing an awesome product to the user?