Like they say on LWN.net, this might just be an incentive to develop free alternatives to Google's apps. The problem is not Android itself, but the stuff they add on top of it; maps, gmail, etc...
These apps are very useful, and it's a shame that they're not open-source like the rest of Android.
Google's attempt at open-source Android apps has been... weak... at best. (Hello, "Mail".)
Google's "Google Experience" is also silly. There is a tablet/media player coming out soon that has Android. (Archos 5) But it won't play YouTube videos because the device does not meet the "Google Experience" criteria due to not having a camera. If you want YouTube, Gmail, and Google Maps, your device has to have a camera. WTF, Google?
(Ironically, I think the iPod Touch has Google Maps but doesn't have a camera. So Google is actually encouraging users to use their competition's product instead of their own. WTF, Google?)
Another alternative would be for Google to simply offer those apps for downloaded as they do for their software on any other platform. I wonder if there is some Google authentication glue that they have not yet modularized enough to allow this to happen.
(That's not to say that there shouldn't be free alternatives developed.)
Those applications are Google's sole bargaining point with handset manufacturers and carriers to have them build Android devices meeting certain requirements in order to make sure the Google Experience is up to par. If carrier/manufacturers don't agree to Google's terms, then they aren't allowed to distribute those "killer" apps with their phones. Making those apps still available to end-users who potentially may or may not have a Google Experience-worthy phone would kill much of their bargaining factor...
That said, as a user of CyanogenMod on my G1, I'd be absolutely heartbroken if his builds could no longer distribute these apps.
I'm not sure which Apps they are talking about as exclusives- in the Android Market, when I search for "Google, Inc.", I see Maps, Voice, Sky Map, My Maps Editor, Scoreboard, Listen, and Finance. What's left? GMail itself? It seems pretty dumb if they're saying they give away all that other stuff and not GMail... or maybe they're just asserting their rights, should they choose not to give away the apps at some point in the future. Doesn't seem to make much sense, given free, useful applications are their bread and butter on the web...
Those applications are Google's sole bargaining point with handset manufacturers and carriers to have them build Android devices meeting certain requirements in order to make sure the Google Experience is up to par.
Not sure that this is such a good idea. As soon as someone builds a phone that is otherwise up to spec but doesn't have a good enough camera, it loses Google Maps. Then the users say, "Android sucks, I can't even see maps" and buys an iPhone instead.
Well, considering the G1's camera is about as terrible as it can get on a smartphone, I can't imagine another phone missing out on the Google Experience for that, but I completely understand your point. But at the same time, if you consider the G1 as a "baseline" set of requirements, do you really want manufacturers putting out anything less? It's already more-or-less commodity hardware available or $100 or less from the carrier, so there's not much incentive to skimp any further without destroying the UX.