This is notable because it's the first year there has been any kind of significant drop in Android hardware profits. And that's not a knock against the mobile OS, though it is a reflection of how the market is playing out.
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It's also worth pointing out that Samsung shoulders much of the blame here. The company's flagship Galaxy S5 device didn't sell nearly as well as it had hoped, prompting the South Korean handset maker to shake things up in its mobile division. High-level executives were patted on the backside and thanked for their service while being shown the door, pink slips in hand, and there's a new strategy brewing at Samsung, one that will see a smaller collection of devices going forward.
Nevertheless, this isn't something that Google should ignore or simply brush off as a one-time thing -- there's too much at stake for that. As Sharma pointed out to Recode, Google needs Android to stay "healthy and balanced," because "without profitability, some of these players will eventually disappear" leaving behind an ecosystem made of Samsung and Chinese OEMs. Such a scenario was never part of Google's vision.
It should also be noted that while Google doesn't profit from Android directly, it scores all kinds of dollars from the services that Android users adopt.