Fragmentation: iPad, iPhone 4, iPhone 3GS, iPhone 3G, iPod Touch 2G, iPod Touch... Each with different capabilities and hardware specs. I've shipped titles to the App Store where I had to tip toe through the minefield of all those permutations, making sure the app worked correctly and/or similarly on all. Sometimes pretty hard to do.
Android is more fragmented in a very fundamental way. If one ignores the iPad and just look at the phones they all have basically the same physical screen size. Android phones come I sizes from 2.5" 320x240 up to 5" 480x800. Designing a UI that works well at all those sizes is a challenge far beyond the more superficial differences of the iPhones.
Android more fragmented? Surely.