As an Apple fanboy, I'm disappointed to post this, but Android will continue to win despite the huge fragmentation problem.
Unlike Windoze based computers, cell phone users expect to replace their phones minimally every two years. So for the most part these users just don't care whether the manufacturers bother to upgrade the OS or whether the few apps they've found need to be repurchased.
When they go shopping and see a brand new Android phone running a better OS with more apps than they had before, they will simply buy it. Especially since there will continue to be two for one offers and lots of competition.
Like Apple computers, iPhones will be superbly engineered, but that hasn't mattered in the computer arena and it won't matter in the cell phone arena.
BTW, I expect Apple to eventually command 20% of the world's computer, cell phone, and tablet market with 50% (or more) of the profits, so it's not like Apple won't be successful. It's like combining all of the luxury cars together under one manufacturer.