When you create an AVD, the android tool creates a dedicated directory for it on your development computer. The directory contains the AVD configuration file, the user data image and SD card image (if available), and any other files associated with the device. Note that the directory does not contain a system image — instead, the AVD configuration file contains a mapping to the system image, which it loads when the AVD is launched.
The android tool also creates a <AVD name>.ini file for the AVD at the root of the .android/avd directory on your computer. The file specifies the location of the AVD directory and always remains at the root the .android directory.
By default, the android tool creates the AVD directory inside ~/.android/avd/ (on Linux/Mac), C:\Documents and Settings\<user>\.android\ on Windows XP, and C:\Users\<user>\.android\ on Windows Vista. If you want to use a custom location for the AVD directory, you can do so by using the -p <path> option when you create the AVD:
android create avd -n my_android1.5 -t 2 -p path/to/my/avd
If the .android directory is hosted on a network drive, we recommend using the -p option to place the AVD directory in another location. The AVD's .ini file remains in the .android directory on the network drive, regardless of the location of the AVD directory.
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