Android is popular because any manufacturer can make a fully functional phone for very little development cost. Free is a strength, not a weakness. Microsoft has a closed proprietary phone and it isn't doing well at all. A closed source Android would fare just as well. A free platform is just that, a platform. It's up to the manufacturer to launch a profitable business either under or over Android. Under meaning the hardware and over being services provided by the platform. It is a win-win proposition for everyone and that is why it does so well.