Ron Amadeo, writing for Ars Technica:
Six years ago, in November 2007, the Android Open Source Project (AOSP) was announced. The original iPhone came out just a few months earlier, capturing people’s imaginations and ushering in the modern smartphone era. While Google was an app partner for the original iPhone, it could see what a future of unchecked iPhone competition would be like. Vic Gundotra, recalling Andy Rubin’s initial pitch for Android, stated:
He argued that if Google did not act, we faced a Draconian future, a future where one man, one company, one device, one carrier would be our only choice.
Google was terrified that Apple would end up ruling the mobile space. So, to help in the fight against the iPhone at a time when Google had no mobile foothold whatsoever, Android was launched as an open source project.
In that era, Google had nothing, so any adoption—any shred of market share—was welcome. Google decided to give Android away for free and use it as a trojan horse for Google services. The thinking went that if Google Search was one day locked out of the iPhone, people would stop using Google Search on the desktop. Android was the “moat” around the Google Search “castle”—it would exist to protect Google’s online properties in the mobile world.
The open source project for Android, means anyone can release their own android powered device without paying any money to Google, but as this article covers in depth, there is more to it than just that. For example, you can’t license the actual Google Play Store on your devices without going through Google.