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It is still a concern, but Google Play Services is going a long way towards minimizing the impact. It is a system level process to which Google can push updates to autonomously without any input from the user or carrier. This allows Google to do an end around carriers and manufacturers that are notorious for dragging their feet with updates, especially with older or lower end devices. Since Google Play Service is compatible with all versions of Android 2.2+, this allows Google to make changes that minimize the impacts of fragmentation. In fact, I have an old Android Phone running vanilla 2.2 Froyo that I use over WiFi only, and it is surprising how many modern apps will still run acceptable on it. This devices is rooted and overclocked, but still, it is a seriously old device that is still reasonably functional. Fragmentation does pose issues for devs and it would be nice if new versions of Android OS were quickly pushed out to most users, but it is not as serious of a problem as some would have you believe. Google is obviously aware of the issue, and I suspect Google Play Services is only a first step to make it less of a problem.