Here are your options:

You can only compete with them If you're able to either:

A) Get a programmer:
- Either raise necessary funds to hire one full time. See my answer on ("When is the right moment to approach investors?")
- Use your own funds to hire a freelancer. See my answer on ("How do I get my game from Prototype to Demo?")
- Or convince a developer to join you as a cofounder for equity. See my answers on that topic ("Where do I find a co-founder to join my team?" --And-- "How and or where do I find a stellar Partner/CEO")

B) Learn how to program it yourself, and program it yourself
- Either have enough time and motivation to learn programming fast enough (could be very difficult, depending on how far along you are, and what you're trying to program)
- Or there are several methods you can potentially use (depending on the complexity of the app you need) to make an MVP without programming. For instance MIT App Inventor (http://ai2.appinventor.mit.edu/), or Marvel App (https://marvelapp.com/)

Otherwise:

A) Either see if you can join the competition. If you contact them and can convince them that you have something to contribute, they might let you join the team. See my answer on that topic ("How do I approach a business with an idea?")

B) Or come up with another idea, and see if you can do steps A or B before someone else starts implementing the same idea

Send me a message if you want to discuss any of these, or other options in more depth.

In any case, I wish you the best of luck,

Lee

Lee is pretty much spot on here. You can do what it take to compete, try to join them or find something else and move quickly. And don't worry, there is always something else.

Well, the harsh truth is that you don't have much. An idea isn't much. A little market research isn't much.

Action is what makes thing happen.

And half-done ain't done.

On the positive side, what has your competitor actually completed?

Or are they still in the 'thinking' stage, too?

Ultimately the best marketer will win...not the best product.

Do either of you have actual BUYERS lined up? Or are you hoping and praying people will buy?

From the investor perspective, it doesn't seem like you have much at all right now. My advice is to worry less about what your ethereal proto-competitor is doing, and concentrate more on getting your own work done. Finish the product and start marketing it. Get sales.

Great you have been considering starting your own business! Very few things are more exciting :)
Now if we summarize the situation: you have an idea , your competitor has a product. I wonder what is the difference between you and your competitor... what is the barriers that for many months didn't allow you to put together a MVP. I guess it's the lack of one of the below (maybe a mix?):
- Money
- Time
- Knowledge (on how to overcome technical or strategic challenges, on how to maximize your money and time, for example)

I can help you, if you want to:
1. Assess if it's worth for you to stay and compete based on their and your offer
2. Established an action plan that will allow you to launch in 3 months time

Looking forward connecting with you,
Serena

Agreeing with all the other comments, Other questions to ask are: What are the gaps in the competitor's product? How can your product fill the gaps? Can your product be a complement to their product (if they sell more, piggy-back off that so you sell more with them)? Can your product do a deeper dive in solving the customer's problem (pick a finer aspect of the solution to delve into instead of trying to do a broader solution)?

Competition doesn't have to mean head-to-head equal products duking it out. How can you work with the competition instead of against them?

Then TAKE ACTION!!! Everyone has ideas. Very few people act on them. In the land of app development, waiting a month is too long. There are precious few unique ideas out there, only limited people acting on them.