I think they are smarter than what you think , They know this is not for everybody , and this is not going to replace android/iOS ever. They targeting people like me who are sick of android/iOS because of closeness of platform.Even canonical with its huge budget admits they don't have plan to replace iOS/android (which as you told is too late for such product , even for Microsoft which have shitload of money ) but they targeting specific user's.
p.s. This is my understanding as simple end-user.I might be wrong.
There is no money in android ? That is one of the funniest thing I ever heard in my entire life ! Just calculate how much android brought people to the internet , Then multiple it by some rate , it will be the money google make from advertising on android platform . How much internet going to grow , Google income will be grow also.
Every search , Every app which you download from google play , It is direct money which goes into google's pocket,
Put aside Google play income which it will get from every transaction _ 30% I think , I am not sure _ (which is huge but let assume google spend all of it on android ecosystem and maintaining).
You clearly misunderstood the article.As I mentioned eariler Yes , there is no profit in selling Android products _hardware:some , software:none_( which indeed article talks about that) , but that is not Google's strategy at all.Please search and read about Google's making money strategy.
Remember Android is "strategy" for Google, "point" is to bring more and more people to cloud/internet.thats why Android as software developed and available from Google for free.
p.s. This is my understanding as simple end-user.I might be wrong.