Despite all the entitled discussions around fragmentation the Android platform will, in the end, win (the mass consumer).
And with the mass consumer comes the money, especially when you drive your business like Google does.
Android will attract the mass consumer, because with the Android OS many newcomers and companies in emerging markets have now the chance to produce low end and cheap devices, that are, in most areas, compatible with the high end Android devices.
It’s just the Wintel way of wining the mass market, here you will find the same fragmentation issues today.
The mainstream apps run on every Wintel device, but there are many special apps, that run only on a specific Wintel device (think of games and graphic adapters). But the user doesn’t care, as long as he has his most importants apps and knows, how to run the more sophisticated ones (if he sometimes needs to).
Wintel is cheap, cheaper than anything else (today), as Android will be in the future.
The Apple iPhone is and will probably stay a great phone, but it will never, because of its price structure, extend its market share to the middle and low end of the mass market.
But in the long run Google needs the mass market, as many others do, too, despite Apple .