Until recently, taking away the ability of old iOS devices to update to a newer iOS version practically rendered them obsolete and useless after a year or two. By then, most apps have required a higher iOS version than what the device still has, so that the old devices will be limited to downloading a minimal and dwindling number of apps.
Timed with the release of iOS 7, Apple now makes it possible for old iOS devices to download apps even if they require a higher iOS revision. If old devices don't meet the iOS version requirements of an app, the option is shown to download earlier versions of apps that still support the version of iOS installed on the old device.
Because of Apple's move, iOS devices can remain in service longer, squeezing out more value, and retaining a higher selling price than before. This means we can still use our old hand-me-down iPhone 3G for a while longer. Apple just gave us more for our money.
http://www.iphonefaq.org/archives/972880
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