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Why are parts of Android developed in private?

It typically takes over a year to bring a device to market, but of course device manufacturers want to ship the latest software they can.
  Developers, meanwhile, don’t want to have to constantly track new versions of the platform when writing apps. Both groups experience a tension between shipping products, and not wanting to fall behind.
  To address this, some parts of the next version of Android including the core platform APIs are developed in a private branch. These APIs constitute the next version of Android. Our aim is to focus attention on the
  current stable version of the Android source code, while we create the next version of the platform as driven by flagship Android devices. This allows developers and OEMs to focus on a single version without having to track unfinished future work just to keep up. Other parts of the Android system that aren’t related to application compatibility are developed in the open, however. It’s our intention to move more of these parts to open development over time.

The CDD will evolve over time to reflect market realities. For instance, the 1.6 CDD only allows cell phones, but the 2.1 CDD allows devices to omit telephony hardware, allowing for non-phone devices such as tablet-style music players to be compatible. As we make these changes, we will also augment Android Market to allow developers to retain control over where their apps are available. To continue the telephony example, an app that manages SMS text messages would not be useful on a media player, so Android Market allows the developer to restrict that app exclusively to phone devices.