If it's true, Eric Schmidt should not be sitting on Apple's board.
What I find interesting is that Android is just another Linux variant. So, in essence, it STARTED OUT as a desktop OS, that was later customized to run on a mobile phone. Making Linux practical on a device for which it was never designed to run on certainly takes time and effort. But translating those enhancements back to a full desktop OS should be fairly simple.
So, what then? Google has their own Linux distro... whoop-dee-doo, so does everyone else and their brother. What's worse for the Linux community as a whole is that this introduces yet another major player into the fold. So, now you have Google competing for the same space as Canonical, Novell, RedHat and others. The Linux community is already competing against itself, more competition makes it even worse.
This is yet another example of Linux's greatest strength also being its greatest weakness. When you have unending variety, there are no standards.