Even though fragmentation on Android is becoming less pronounced given that 96.4% of Android devices are running 2.1
+ there are still issues, especially now with tablets coming into the market. In another attempt to end fragmentation, and to make it easier for developers to manage apps, Google is now allowing multiple APKs for each product listing in the Android Market.
The way it has historically worked is that each listing would only represent one APK, or installer file. So, if developers wanted to have a version of their app that supported Android 1.5+ and another for 2.2+, the dev would have to have separate listings for that app. Additionally, if developers didn't want to use the new fragments system in order to have one app that could work across phones and tablets, again there would need to be multiple listings.
Now, developers can have multiple APKs per product listing that are distributed based on the device and OS version of the user. This makes it easier for developers to manage their apps, but it also reduces clutter and confusion in the Android Market by having one listing for each app. And, this should also allow developers to make apps and games smaller, because each APK doesn't need to contain data to cover any device. This will also allow developers to target specific devices with different versions of an app, which could be as simple as different capabilities based on your OS version, or it could mean a device with a higher resolution screen gets the HD APK instead of the lower res graphics.