Ecosystem is king
I think the Ecosystem is easily as important as the device itself. Google needed the manufacturers in the early days to gain market share, and the manufacturers needed Android to attract customers (I don't want a smartphone with no App Store, that would be like going back to Windows Mobile 6).
But Android is huge now, and can easily compete with iOS. Google could probably shut out all the others and start making money. I'm not sure that's a good thing for consumers though.