1. If fragmentation was a big deal, then Android wouldn't be the #1 smartphone os. Software differentiation allows for hardware differentiation, which is a major advantage for Android over the iPhone.
2. 7" and 10" tablets are in different categories. This years Fire might take a few sales away from Apple, just because it's a well marketed device and so much cheaper than the iPad that it might convince people to just get the cheaper, smaller device. But, it won't be a large number of consumers. It will sell well, but most sales will be from consumers who weren't going to buy an iPad, anyway.
3. Next year, if Amazon releases a 10" tablet for $300, it will outsell the iPad within a quarter and will definitely steal a ton of potential iPad purchases.