It's more like Google's stumbled onto a gold mine that's already been looted:
Google makes $5-$10 per Android phone, maybe 10% of what it's partners make. That's about the same amount as Microsoft makes off each Android phone and is perhaps 1/50th of what Apple makes off each iphone.
Even worse it turns out that the half empty gold mine is on public land and any crazy old coot can waltz in and start mining themselves:
Android won their "empire" by being the only credible licensed iphone clone in 2009. The real question is whether this empire is going to be of the Han/Roman/Windows variety as so many commentators assume or will it be a short lived dynasty like the Qin/Napoleonic/Netscape variety.
I'll put my money on a Three Kingdoms scenario playing out. Why do I think WP 7 has a ghost of a chance when everyone's done nothing but dismiss them? Let's review:
Android phones started shipping in Fall 08. However they really didn't have any traction until Fall 09 when Verizon started pushing the Droid. And it wasn't until Froyo phones shipped en masse in Summer 2010 where Android started to dominate carrier shops.
In the same way WP7 launched buggy, incomplete and lackluster in late 2010. It had no traction for it's first 3 quarters. Lately though we've seen a mature OS update released on a 2nd generation of phones that were designed for it.
More importantly Microsoft has made no secret of it's desire to buy market share with retail subsidies. And it will certainly be buying this market share at Android's expense. How much they're willing to lose buying this market share isn't clear but if it's anything like the money they've plowed into Bing that's a lot.
Don't forget the $1/year market value of a GPS probe.
I work for TomTom who's been battling for years to collect GPS probes so that they could provide the best HD traffic.
Google recently announced their Traffic layer which magically offered almost similar quality with full world-wide coverage all made possible by their thousands and thousands of free Android GPS probes.
Just a small reminder that there might be more hidden benefits of Android.
Google has other agendas than profiting from the sale of phones. They have an application store, a music store, a movie store, and a book store, for starters.
They also have an ad business which gets to safely live on the most popular smartphone OS without real risk of it being shut down for competitive reasons.
They have a massive lever with which to move other projects as well. They have millions of users of their maps program on mobile, for example. They get voice search data. They get people doing searches. They get many more Gmail subscribers. Soon those millions will be nudged toward using G+ because it comes on their phone and offers some nice benefits.
As for whether or not Android is here to stay, there's a measure of user lock-in just like there is with the iPhone. You already have your applications and media that you have paid for.
And according to most everyone, their latest version of the OS is a marked step forward, bringing Android's weak points up close to parity with iOS while continuing to build upon the relative strengths that have been there for the past few major releases.
Microsoft may gain traction with their phone and ecosystem, but I'm not sure why that's any reason to forecast that Android will go the way of Netscape.
The future is Open Source. That's why Microsoft has no place there. Also don't be fooled by how much money is made where. Money is just a tool; one of.
Google makes $5-$10 per Android phone, maybe 10% of what it's partners make. That's about the same amount as Microsoft makes off each Android phone and is perhaps 1/50th of what Apple makes off each iphone.
Even worse it turns out that the half empty gold mine is on public land and any crazy old coot can waltz in and start mining themselves:
Android won their "empire" by being the only credible licensed iphone clone in 2009. The real question is whether this empire is going to be of the Han/Roman/Windows variety as so many commentators assume or will it be a short lived dynasty like the Qin/Napoleonic/Netscape variety.
I'll put my money on a Three Kingdoms scenario playing out. Why do I think WP 7 has a ghost of a chance when everyone's done nothing but dismiss them? Let's review:
Android phones started shipping in Fall 08. However they really didn't have any traction until Fall 09 when Verizon started pushing the Droid. And it wasn't until Froyo phones shipped en masse in Summer 2010 where Android started to dominate carrier shops.
In the same way WP7 launched buggy, incomplete and lackluster in late 2010. It had no traction for it's first 3 quarters. Lately though we've seen a mature OS update released on a 2nd generation of phones that were designed for it.
More importantly Microsoft has made no secret of it's desire to buy market share with retail subsidies. And it will certainly be buying this market share at Android's expense. How much they're willing to lose buying this market share isn't clear but if it's anything like the money they've plowed into Bing that's a lot.