Android this week: Google kills Android rival; Jelly Bean for Intel; 500M Androids globally

Apple’s(s aapl) iPhone 5 launch grabbed most people’s attention this week, and perhaps that’s a good thing: Fewer people might notice that Google is playing hardball with Acer and Alibaba, a huge Chinese e-commerce company. Acer was set to hold a joint press event with Alibaba to debut a new smartphone for the Chinese market, but the event was cancelled one day prior. The alleged reason? Google stepped in.

Alibaba's Aliyun OS on phonesNo details were immediately available, but on Friday, the Wall Street Journal reported further on the situation. Alibaba’s mobile platform, Aliyun, was objected to by Google because was a “non-compatible” version of Android. Acer, which is a Google Android partner, had “committed to building one Android platform and to not ship non-compatible Android devices,” according to Google; likely referring to the Open Handset Alliance (OHA) partnership.

Google reportedly also suggested that Acer would no longer be allowed to build Android devices if it went on the with press event. I haven’t seen the OHA partnership terms, but I suspect that’s what Google was alluding to when speaking of Acer’s commitment. While others have used Android as a base platform with major user interface modifications — Amazon’s Kindle Fire, for example — the Aliyun platform must have done something differently with the software that doesn’t benefit Google.

A related question this week is: How much does Android itself benefit Google and its partners? In advance of this week’s Apple event, Google noted that 500 million Android devices have been activated worldwide since 2008: A staggering number that’s expected to double by the end of 2013. Yet, few affiliated with Android — save Samsung — are earning profit as Apple is taking the lion’s share of smartphone revenues and profits. Google is quiet about Android earnings although documents from its court case against Oracle suggest only $500 million in profits from Android between 2008 and 2011.

Intel's Atom processorConsumers don’t care who is or isn’t making money on Android, so it’s a non issue for them. Most aren’t interested in which chip powers their Android smartphone or tablet, either. That may bode well for Intel (s intc) which now has Android 4.1, or Jelly Bean, ported to its chips.

Only a few Android devices use Intel chips today and none have been major successes. But that’s not due to the performance or battery life of these; Intel’s Atom finally appears to be competitive with other smartphone chips on both aspects. I expect to see a major handset maker take a chance on Intel as early as next week: Motorola and Intel are planning a joint event and a new Intel-powered phone may be the reason why.