I was at Stanford during the time when the iPhone launched in the late summer of 2007. In the subsequent fall quarter, I took a class that was taught by Eric Schmid. When the topic in one of the classes came to Android, Eric admitted straight out that Google has one primary goal: to get more people onto the Internet. Because more people on the Internet would mean more people would search for content, generating more revenue for Google. Making Android available for free was lowering the cost for mobile phones.

There were other devices out there that qualified as smartphones and enabled users to browse the Internet (just think of the terrible HTC Touch, powered by Windows Pocket PC). Hence the threat wasn't just Apple.