What is Android?
To get a better understanding of what Android is capable of, we should first get a good handle on what it actually is.
In 2005, Google acquired a little known company called "Android, Inc", which had been developing software for mobile phones. Soon after, Google began filing various patents with a focus on mobile phone technology. This prompted the media to begin speculating that Google was planning on releasing a "G-Phone" to go head-to-head with Apple's immensely popular (and largely unchallenged) iPhone.
But in 2007, rather than announcing a single phone they intended to bring to market, Google brought together a group of some of the most important companies in the mobile industry and created the Open Handset Alliance (OHA), a consortium designed to develop open standards for mobile devices. The OHA revealed that their first product would be an open source mobile OS, called Android, designed to run on the full gambit of mobile devices (phones, tablets, netbooks, etc), rather than an OS tied to a specific piece of hardware (like Apple's iOS). In October of 2008, the HTC Dream (more commonly referred to as the G1) was released and became the first official Android device.
Android is made up of several software layers which are intended to make the OS more modular and easier to develop for. Android is based on the 2.6.x Linux kernel which handles hardware interaction, GNU userspace utilities for low-level system management, and various open source libraries such as OpenGL, SQLite, and FreeType.