I believe that Android has a number of things that need to come up to speed for it to remain a long-term player in the mobile space, but there are also a lot of things I think Android gets right. This is a list of 10 things Android does well that provide it with competitive advantages.
1: Hardware access
The Android development model's wide open nature allows app developers to do things (or do them more easily) that they can't do on other platforms. As a result, entire categories of applications can be written for Android but not for other platforms. If that is what you need (and for many folks it is), Android is a winner.
2: Variety of device types
Because OEMs can access the source code and modify it to fit their needs, and because of the Linux-underpinnings of Android, it is relatively easy for Android to find its way into all sorts of things that are not smartphones or tablets. When you think of Android not as a phone OS but as a compact Linux distribution with specialization in certain capabilities, a lot of avenues for use open themselves up.
3: User modifications
Android phones are much easier for end users to directly control with software. Its use of certain common computing standards and ideas (for example, presenting its storage as a standard USB thumb drive when attached to a PC) makes it easy to make those modifications, put data onto the device outside the applications themselves, and do much more with the phone.
4: In-depth system information
Again, what we see with Android is that applications (and users) have much more access to the device's guts. While this may not be necessarily useful for the typical user, the capability certainly does not hurt, and power users and developers get a lot of mileage out of it.
The Android multitasking model is identical to a PC's. Although this has drawbacks (particularly around resource usage), there is no substitute for it if you want to write certain types of applications. Sure, other systems may allow tricks like push notifications, but they really can't do everything that a full multitasking system like Android can do. Again, this speaks to Android enabling applications that just aren't possible on other platforms.
6: Support for new hardware concepts
If you have a great idea for a hardware device, and that idea goes outside the established hardware universe, Android is your only real option as a manufacturer. Apple and RIM completely control the iOS and BlackBerry hardware, respectively. And with WP7, Microsoft has established certain baselines that devices must meet. While it doesn't forbid going above and beyond it, it is much harder for an OEM to do something like the Droid Bionic with WP7 than it is with Android.
The Android widgets allow for some really neat functionality to be put directly on the "desktop" of the device. Yes, the WP7 Live Tiles are a great way of providing a basic at-a-glance piece of functionality, but the widgets go so much further than that. For example, as much as I like my WP7 phone's Facebook integration, the Facebook widget that came with the MotoBlur UI is phenomenally easy to use and is not possible on anything other than Android.
8: Google integration
If you have brought Google's services into your workflow in a significant way, Android does a good job of bringing those services to your phone, tablet, and other devices. Other OSes have their own integrations, but they are with systems that right now do not have much traction or usage outside those integrations. Lots of people are heavily invested with Google's products long before they buy a smartphone, so for them, Android is a natural extension of their work habits.
9: Carrier compatibility
At this point, Android is ubiquitous. Every carrier offers Android phones and usually has a good variety of them to boot. If you make an investment into the Android ecosystem, you can be sure that even if your device can't transfer, your knowledge and integrations will go to the new device pretty smoothly. As iPhone owners could tell you, before non-AT&T carriers had the iPhone, it was pretty miserable to be tied to just one carrier.
The cost of Android itself ranges from "free" to "cheap" depending on the OEM and who they are paying patent protection to. (I know, that's a mess!) While the cost of the OS itself isn't a major component of the cost of making a phone, Android has been easy for phone makers to work with, so they can put it on a wide range of phones at different price points and still make a profit. This allows you to get an Android phone at a very attractive price.
Justin James is the Lead Architect for Conigent.