The latest stats from Google reveal that most of the Android phones are being upgraded to the latest versions of the OS. Every manufacturer is very keen to get on the bandwagon and capture the market share, which is good for the users and the community.
Image Source : http://developer.android.com/resources/dashboard/platform-versions.html
The above chart gives us an idea of the overall OS spread (August 2, 2010). 59.7% of the Android phones are now running on Android 2.1(Donut). Isn't that great. Nice. And we will definitely see the percentage for Android 2.2(Froyo) increase manifold when manufacturers push updates on the latest version. But, there is a substantial amount of phones still out there running on 1.5, though not a majority. But, if we talk about only numbers, 20.3% of the total Android phones is still a huge number. Now that's a problem.
With Android 1.6 and up, apps can be designed and developed for different density and screen resolutions. The cupcake update doesn't have this feature. There are a few workarounds which enable you to develop in 1.6 and up and still support devices on 1.5, but it's a pain. I am sure many developers will agree with this. Apart from this, there aren't major differences that would hinder developers in making apps to suit all platforms.
And with Android 3.0(Gingerbread), rumors say that it will bring support for tablet sized devices, I am not sure how to absorb this piece of news.