I'm not going to be a popular guy but I'm predicting he is going to be right. This has the stink of deja vu all over it from the early 90's. Apple was raking in huge cash being the only decent GUI out there and being the only real solution that could address things like color correction, prepress, etc.
The Mac's were more expensive than PC's but you had the complete value proposition to justify that. Then Windows 95 came along and though it still sucked, it was within the tolerably sucky realm for most people. The Mac OS and it's limitations suddenly seemed quite old. The bottom fell out of PC pricing. I can distinctly remember a friend of mine financing a Pentium class Acer computer for about $2500 and less than a year later they were half that. 18-24 months after that there were PC shows everywhere where a machine 4-5 times as powerful were being built for $800.
It's pretty clear that the smartphone is getting ready to become the commodity feature phone. In less than four years we will have gone from a single core 400 mhz processor to quad core processors at 1-1.5 ghz on phones.
That doesn't mean that Apple will die, go extinct or go broke or anything like that. They've simply reverted back to their old ways too much. I've seen it. We've all watched it happened like a frog being boiled and it is getting ready to bite them in the butt.
Fragmentation won't matter at all. You really are only talking a few changes because the fragments still all center around the same few variables. Kindle Fire and BN Nook, they still have the same processor and screen size as examples. Even if it causes a few issues people just don't know better, put up with it, or the network effect of everyone around them having the same devices and finding the same kludgy solutions overrides the problem. We exactly this happen with Windows. Did Windows 95-98, NT, etc. all suck? Absolutely but when everyone can find the one guy on the block who can fix it and there is one guy every block, then the problems don't seem so big.
It's already estimated that Android has 52% of the market for smartphones.
I'm predicting Apple will stay between 15-20% and that Android will continue to march toward higher marketshare and as part of that marketshare the prices of smartphones will come crashing down to the point to where $175-199 OFF CONTRACT for a dual-core HD video shooting 3.5 inch smartphone becomes reality.
Apple has become too insular again and they are hurting themselves. They are also biting the hands in their own eco-system that feed them. People are noting that not only is Apple still selling iPods but that they command a majority of the PMP market. That was because they made the very controversial decision for them at the time to put Quicktime and iTunes onto Windows. They've stopped doing things like this and are watching competitors walk past them putting their solutions on all platforms while making it best on their own platform.
You don't see Google declaring that gmail is only going to work on Android. Where is Pages, Keynote, and Numbers for Windows? Where is iMessage for Android and Windows Phone? Where is Facetime for Windows? Why can't Apple even provide iBooks for Mac? They can't even sort out if I'm using iChat or Facetime for goodness sakes. It smells like rot on the vine.
Amazon will sell me a Kindle. They'll sell me a Kindle Fire. They'll have an app store for everyone who doesn't have a Fire. I can read my Kindle books on my iPhone, my Android phone, my Mac, my whatever. Google is doing the same thing. Put it out everywhere. They aren't trying to lock you in by pure ecosystem, they are locking you in via network effect which then becomes the true eco-system. In addition they now have an incentive to make their Kindle reader app better for other platforms and can even blame Apple for the iOS inferiority by declaring that items like the links to their bookstore had to be removed per Apple. I have an Android phone to play with and for the first time the Kindle app has become better on Android. For the first time the Facebook app has reached parity with the iOS app within the same month. The gap is closing quickly and Apple demanding a 30% cut, tossing out any app they feel competes with them too much while not improving their own solutions and finally, simple declaring certain features can't be touched or added until they deem it so (Hello volume up button for camera) just lets the competition catch up and leapfrog them.
Apple can still fix this and change what they are doing wrong. They are estimated to push out 30 million iPhones this quarter and that will be amazing. I'm sure it will help versus the 150 million Android phones that will probably be shoved out there in various forms. However there's definitely been a change. Grandma knows what a Kindle Fire is and that is very different than the past. Apple's solutions are definitely still the best and also still good enough but the spec whores, the cheapskates, and everyone else is finding a good enough solution in Android. Also the ecosystem for their solutions is showing up everywhere. It isn't as tightly integrated but they are also willing to put it on your Mac, PC, car who knows what. That counts for something too.