Use of the Web on smartphones is booming, and its use is accelerating. There's money to be made there today, and significant money to be made there in the future. And the mobile operating system booming most of all is Android.
For now, people tend to use the default browser on their phones, and leave it at that. There's not much choice yet for phone browsers on Android, but that will change.
Ultimately, as people use their phones for constant Internet access, they're going to want to keep their phones in sync with their PCs. And that means they'll want to keep their browsers in sync, especially their bookmarks, and possibly their history as well.
Firefox 4 includes Firefox Sync, that automatically syncs all that data. It can even let you see what tabs you have open on another device running Firefox, and then open them in your current device. (Users of Firefox 3.5 and 3.6 can use the Firefox Sync Add-On.) You can expect this feature to be eventually built into the Android Firefox browser. And expect other browser makers to offer the same feature.
That means many people will want to run the same browser on their PCs that they run on their phones. So if Internet Explorer isn't on their phones, they may want to switch to a competing browser for their PC. True, they can run an add-on like Xmarks for syncing bookmarks and history --- but they would prefer to do it just on the browser itself.
It's understandable that today Microsoft doesn't want to develop for Android, and will want to push Windows Phone 7 as much as possible when it ships. But in the long run, it's short-sighted not to consider releasing a version of IE for Android.