While the new iPhone 5s and 5c are important to Apple (AAPL), its new mobile operating system iOS 7 may be even more critical to its long-term prospects.
It was designed to reinvigorate the platform against the more modern look of Google’s (GOOG) Android and Microsoft’s (MSFT) Windows 8, but change brings risks. The unfamiliar user interface could confuse existing iPhone and iPad owners.
The new operating system is incompatible with some devices including the original iPad and some features are exclusive to new phones. In addition, the 900,000+ apps in Apple’s App Store must be updated and some developers aren’t bothering; others are charging for updated versions.
Over the next few days, Apple should find out if it has a runaway success on its hands or a PR disaster.
One of the key advantages Apple has over Android is its avoidance of a fractured install base for iOS. Up until the iPhone 5, devices kept the same display aspect ratio and there are still only four different iOS display sizes making development relatively easy — in comparison, Samsung (SSNLF) alone had 26 different display sizes back in 2012 and that was before new product releases this year.
Apple users have always been quick to upgrade to the latest operating system as well. In June, 93% of the 600 million iOS devices sold to date were running the most recent version of Apple’s mobile OS, making it easy for developers to focus on apps that utilize the latest features.
In contrast, just 8.3% of Android devices are on the current 4.2 version of that operating system. More than 30% are running Android Gingerbread, a version of the OS first released in 2010. According to Gizmodo, there are currently something like 12,000 different Android devices in use.
This advantage is one of the reasons why Apple’s App Store still dominates Google Play for app revenue, pulling in double the revenue despite the fact that Android dominates mobile platform market share. As an app developer, would you rather target the 93% of 600 million iOS devices running the current iOS, or the 8.3% of the billion Android devices running the latest operating system?
Android developers can access a larger market by adding compatibility for older versions of the operating system, but this adds to development time, testing time and cost. So many new Android apps actually have a smaller potential market than iOS versions, despite Android’s lead.
But the release of iOS 7 changes things.