The general trend for embedded devices is in the direction of richer ways of user interaction. That usually involves adding touchscreen LCD. Once you add LCD,

The general trend for embedded devices is in the direction of richer ways of user interaction. That usually involves adding touchscreen LCD. Once you add LCD, you want nice graphics, animations etc. While you can use microcontrollers for low-res LCDs, when you get past, say 640x480px resolution, due to increasing memory and CPU requirements it often makes sense to go with system-on-chip solution running high-level OS. The existing libs/frameworks to create nice looking, polished UIs for embedded Linux devices are not as easy to use, well understood and having large base of developers as Android is. So this leaves device manufacturers seriously considering Android. Working on software stack directly with SoC manufacturers is PITA (although they want you to buy chips from them, they don't want to spend time on support), so having a flavour of Android geared towards embedded devices is a good value proposition from Google.