Great, so this means that consumers will pay for the OS and this means that they become paying users.
Not really.. There's an OEM in the middle deciding what mix of preinstalled crapware is best for the OEM where they can now mix Google and other crapware (more freely than before.)
Call me a pessimist but I suspect Google will just do both: Take the money for the Play ecosystem and continue exploiting your personal data for financial gain.
In those phones Google will take the money from the Play ecosystem and $40 from the vendor. The Not-Google company that is pre-installed will exploit your personal extra hard to remake the $40 they gave Google.
Not-Google will exploit your personal data as hard as they can. But so will Google -- why do you expect them to leave money on the table?
This seems just for show. In all likelihood, nothing will change and 99% of phone sales will continue with the current setup. It's unlikely that someone will invest to build a competing suite to gmail+youtube+maps.
Gmail : pick your client and add integrations for an online business app suite or combination of apps integrated together. The email itself is easy to replace, what's stalling adoption is integration to services like drive, and sheets. Replace those integrations with something like a self hosted open office.
YouTube : probably the hardest to replace. The most likely companies to be able to provide the raw capital to compete in this space are porn companies.
Maps : in a word, waze.
The rest of the app makers will follow like a dog to a bone.
isn't waze also google? In general ,even if someone (like microsoft) invests heavily into this, they 'll stil be building on a platform that google controls (android). And this is only for the EU area, so not sure how such a business plan would work out.