We estimate each Android unit contributes 4x the gross profit of a feature phone unit and that 10 million Android units will contribute nearly half of the gross profits in MOT’s handset division. (link)

Given these estimates, the value of a free operating system for both carriers and handset makers is clear. Not having to pay for the operating system increases handset margins. Open source shows again why it is a compelling distribution model, if you can make money from all those users at scale.