When it comes to mobile operating systems, Android is indisputably dominant. Last quarter, according to research firm IDC, nearly 85% of the smartphones shipped worldwide were powered by the Android operating system.

On the surface, this figure suggests that Google (NASDAQ:GOOG) (NASDAQ:GOOGL), as the company leading Android's development, is equally as dominant -- in reality, the situation is far more complex.

While Google's version of Android does ship on the majority of smartphones sold globally, a large (and growing) portion of the Android user base is running a heavily modified -- or forked -- version of Android. According to ABI Research, as many as 20% of the phones (or more than 23% of all Android phones) shipped last quarter were powered by an Android fork.

As Android forks grow in popularity, Google's dominance of mobile computing space could be threatened.

The rise of Android forks
Forked versions of Android are defined by their lack of Google services. In the U.S., the most well-known Android fork is Fire OS -- Amazon's (NASDAQ:AMZN) version of Android that powers its Kindle Fire tablets, FireTV set-top box and the Fire Phone.

Owners of Amazon's products cannot (without significant tinkering) use Google's mobile apps -- everything from the Chrome browser to gmail to Google Maps is inaccessible on Fire devices. But the most significant difference is the absence of the Google Play app store -- rather than purchase apps and media from Google, users of Fire OS must buy them directly from Amazon.

In terms of tablets, Amazon has had some limited success in North America. Its Fire Phone, however, hasn't been around long enough to impact global smartphone market share figures. Rather, that 20% of phones powered by an Android fork is largely coming from China.

Although the company is just over four years old, China's Xiaomi has emerged as the top selling smartphone vendor in the Middle Kingdom. Xiaomi's Mi phones, which are sold at a significant discount to rival handsets, run a forked version of Android known as MIUI. Like Amazon's Fire OS, MIUI strips out Google's services in place of Xiaomi's own.

The importance of Android
Google officially withdrew from China in 2010, so the dominance of Chinese Android forks is neither surprising nor particularly threatening. In the U.S., Amazon's share of the tablet market has steadily receded as more competitive Android-powered tablets have been unveiled, and anecdotal evidence suggests that the Fire Phone has -- at least so far -- seen a tepid reception.

But Android forks remain a threat to Google's mobile ambitions in the sense that they pervert the company's goals. Unfortunately, Google doesn't break out its mobile revenue figures, but as mobile devices grow in popularity, the search giant's future is inextricably linked to the success of Android. Research firm eMarketer estimates that the bulk of Google's search revenue will come from mobile devices by 2016.

On the company's last earnings call, Google's now-former Chief Business Officer Nikesh Arora predicted that mobile search would eventually overtake desktop search in terms of monetization -- perhaps because of other data (location) mobile devices allow Google to collect.

The Google Play app store also brings in a nontrivial amount of revenue. Once again, Google does not directly disclose the figure, but has admitted that it is behind the rapid growth of its "Other" business segment, which brought in $1.6 billion last quarter, up 53% on an annual basis. As the number of Android-powered devices grows and usage steadily increases, the dominance of Google Play could meaningfully affect Google's business.

Not as dominant as it appears
Excluding forks, Google's version of Android still powered about two-thirds of the smartphones shipped last quarter -- more than five times as many handsets as iOS. But Google's dominance of the mobile space is not as significant as it may initially appear.

As a percentage of total smartphones, Android forks are increasing in popularity -- last quarter, their share of the market rose 3% sequentially. If Xiaomi can successfully take its business model to foreign markets, and Amazon can turn the Fire Phone into a success, their share of the market should continue to increase.

Google has plans to thwart the Android forks -- its new Android One initiative seeks to help hardware manufactures build low-cost, high-quality Android phones for emerging markets consumers. Android One handsets ship with a stock version of the Android operating system -- ensuring that Google's services lie at the center of the device. Google's first Android One market, India, seems to have been deliberately chosen, as Xiaomi began its expansion into the country earlier this summer. Android One phones could prove a potent alternative to Xiaomi's handsets, limiting the appeal of its Android fork. Still, Google certainly has its work cut out for it.

Maintaining Android as an open source software project has allowed it to grow in popularity, but is not without its consequences -- namely, the increasing popularity of Android forks and compromising Google's share of the market.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.