The store is full of complaints about compatibility, are all the complainers wrong ? Make the system too open and people install things that break other apps- not much you can do about that. Which particular hardware do you code for? Don't say all of them because you know people are simply not going to do that, they are going to code for either the most popular devices or the one they personally have. So some apps either don't work or are not optimised for particular devices.
When I upgraded my original Galaxy to an S3 I naively expected all my previous apps to work of course not all of them did. Normal expectation is that apps written for low end devices would always work with higher end devices, but this doesn't seem to work in the Android ecosystem. Plus the "phone" apps that won't work properly on a tablet. I assume this situation will get better with time, like it did with the varying PC hardware, but to say it isn't fragmented at the moment is ignoring the evidence.