Perhaps in retaliation to Microsoft's lampooning of them or just to re-assure their userbase, Google has sought fit to explain and justify their recent launch of the Android SDK. The project, which has its roots in Linux, aims to offer an open platform for mobile phones and PDAs. Given that the current players in that market are already very well entrenched (such as Microsoft and Nokia), Google is treading over some thick ice that may be difficult to break.
Their assertion is that the cost of hardware has been falling for mobiles, whereas how much the software on the phones cost, relatively, has been rising. They also see a lack of innovation, and believe that an open source environment will not only encourage innovation and software development, but ultimately lower the cost of phones. Of course, offering $10 million to aspiring developers helps as well.
They made it a point to mention similar projects, like OpenMoco, that offer an open-source platform for a phone. Google's efforts are different, they claim, due to the momentum it has in the industry along with the mass of Google itself backing up their new endeavor. Time will tell, of course, and a year from now we'll see if this was the right choice.