If Android phones weren't freebies or heavily pushed/customized by the carriers, it would probably be in the same boat Microsoft is in right now. That OS has legs only because they're taking over from feature and feature-less phones. There's a very small percentage of customers who are moving to it from other smartphone products, but the big bulk of its numbers are simply people who want a new phone.

MS can go this route, but it's difficult to compete for phone models when Google's offering is close to free. If they want to make money they have to look at Apple and RIM for inspiration and change their mobile business to be nothing like their desktop business. Maybe then we'll start seeing the corporate world embracing MS mobile handsets.