A lot of the focus on making money off of Android is focused on writing applications for distribution through the Android Market. Given the huge wave of publicity surrounding the iPhone App Store and authors' successes there, this fixation is not surprising. However, it does leave out other possibilities, particularly ones both old (OEMs) and new (remixes) that are more in line with Android's abilities and objectives.
In the years before the iPhone, a likely way to make nice money off of mobile application development was to secure an OEM distribution deal. You would write an app, perhaps initially sold directly to users. OEMs (device manufacturers or carriers) would find your application compelling and offer to license it for distribution on some upcoming devices. You would be paid a license fee for the application, plus perhaps some money for customization, such as re-branding the application for the carrier.
Compared to one-off sales to users, OEM deals are lucrative. Of course, it is unclear anyone ever bought their own island in the Pacific from such deals. And, it should be pointed out that having personal contacts with OEMs helps tremendously in striking such deals.
Android, being open source, lays the foundation for a more interesting version of the OEM deal: the remix.
While Windows and OS X are made by one firm and come in limited versions, Linux has a large number of independent "distros". Distrowatch.com tracks 302 of them at present, and that does not count separate platforms like Android that are built atop Linux. Some of these "distros" are simply projects to "scratch the itch" of some individual developer, but others have specific purposes, such as operation on older equipment (Puppy Linux, Damn Small Linux), or to create specific appliances
(Mythbuntu, FreeNAS).
Any given Linux distr is a combination of the Linux kernel, device drivers, and applications. What the distro does and what it is good for depends upon the mix of drivers and applications. Mythbuntu has drivers and applications to serve as a DVR, while FreeNAS has drivers and applications to serve as a
network attached storage server.
One could apply the same approach to Android, creating the remix. You would take Android, perhaps add in support for additional devices, and add in support for particular applications and content stores, and sell the remix to OEMs.
For example, one could create an Android ebook reader remix. You could do all the engineering work to create an Android environment focused on reading ebooks, from making a reader application the "home screen", to integrating catalogs of available ebooks for sale, to adding support for larger screens or perhaps electronic ink displays. You would sell that remix to firms interested in entering the ebook market but wishing to reduce their cost and risk by using your remix rather than engineering it all themselves.
Similarly, you could make an "enterprise Android" remix (blending Microsoft Exchange connectors and Microsoft Office document viewers and such), or television set-top box remix, or a stripped down programmable calculator remix, or whatever you can imagine. What you do, in effect, is convert your domain expertise in mobile operating systems into something that can be sold on a per-unit basis, rather than merely per-consulting hour. Moreover, by integrating the relevant portions of the Android stack, you add more value to the OEM than merely offering an application or two.
Note that the remix option is only practical for an open source mobile operating system. You cannot, for example, create your own remix of the iPhone OS, simply because Apple does not license it to anyone else, let alone allow them to add more to it and deploy it on other devices.
Making and selling remixes to OEMs is not for everyone. However, it is definitely a way to "climb the food chain" from selling 99-cent apps in an app store.
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