zlacker

     It wouldn't be all that surprising if it would 
     go closed source

As with anything in life, there are forces that prevent them from doing that. Also, the whole point of open-source is the right to "fork" which trumps all other freedoms you might have.

Xorg came into existence because of disagreements with the XFree86 license, while XFree86 died ... http://en.wikipedia.org/wiki/X.Org_Server#History

     Specially when any company could just rip the source

Few companies can do that because few companies have the resources to do it. Nokia is a monster amongst phone makers and they weren't able to make their own OS, even when their own survival depended on it. These companies using Android depend on base Android to remain open-source, they made an investment in Android because it was supposed to be an open standard, which is why Google must also play nice, otherwise they risk forks. And in case you haven't noticed, Amazon just forked Android, so it's not unheard of.

You see, forks from small players cannot survive because they'll lack the advantages of the main branch (especially the Marketplace). On the other hand, Google must play nice because a fork coming from an alliance between several of these players can kill the main branch.

    Imagine if many cheap Chinese manufacturers release 
    decent phones with it, that cost 3x cheaper than 
    the rest

Considering that most phone manufacturers are assembling their phones in China, what would prevent them from also releasing cheap phones?

Also, most people don't want cheap. Most people want reliable and affordable, which is why iPhones and Galaxy S2 are selling quite well, even though there are cheaper alternatives on the market, even from trusted brands. Consumers don't want the cheapest products, instead they want the best value/price ratio (as long as they can afford it). Making an analogy with cars, there's always going to be a big market for Audi, BMW and Mercedes. Some people even prefer to buy second-hand cars from these brands, instead of a cheaper but out-of-the-factory alternative. That says a lot.

replies(1): >>stouse+2J