Why Android OS is open source ?
The Android OS source code is released mostly under the Apache License. Anybody is allowed to download the source code and change it however they like, but they are not required to make their changes available in source code form to the public. This is why we can't change and recompile things like HTC Sense or MotoBlur -- the changes to the base Android source code aren't available to us. While many folks (myself included) don't like this situation very much, it does make sense from a business standpoint. If manufacturers had to share all of their secrets, there wouldn't be as much monetary incentive to innovate, so the source was offered with a far more liberal license. It certainly worked, as we see devices from many major players in the electronics world. Source
