"In an ocean with great waves, whales fly into the air unnoticed, but in a calm pond, even the tiniest minnow makes a ripple." -confucius

When the iPhone debuted, no doubt Google sensed the impact, and Apple's ability to create an effective closed ecosystem had already been proven with iTunes. I believe that Google wanted to undermine the market long enough to understand it. True enough, "android winning" was not the same as "Google winning," but it did mean everyone else "losing." I believe that for Google, Android started as a strategy in search of a goal. It was a smokescreen to prevent Apple from taking a dominant position by default. As the data poured in, they began to understand how to leverage it, and the Nexus line became an expression of such understanding, working to establish more control, and hopefully emerge from the smokescreen they had created.