Google released its latest numbers on Android distribution earlier this week and the numbers aren’t necessarily surprising.

Over 96% of Android devices are on Gingerbread or older. With 54% of Android devices running Gingerbread v 2.3.3 or newer, it may sound like a good news for Google but as it turns out, more than 40% are still on Froyo, or 2.2, or older, something from at least two years ago.

Android developers will therefore need to target v. 2.1 as the base OS for apps if they want to reach the largest potential user base, or 2.2 if they’re willing to cut 8.5% of devices still running Eclair.

The release of 4.0 back in October (which is really version 3 as far as handsets are concerned) means nothing to the greater Android installed base as it has not been made available for any Android phone aside from Galaxy Nexus. If you happen to have an Android phone from 2010, you may as well forget about 4.0 for a while as barely any of them will get it.

Corollary to what was discussed in my post on DailySocial the other day, there is simply no incentive yet for developers to target the latest version for the next quarter as handset manufacturers won’t have them distributed to their phones until then. That makes it five to six months since 4.0 was released.

API level is essentially the level of technological advancements that come with each version of Android. Version 2.1 has API level 7 while version 4.0.3 is on 15. That should give you some idea as to the limitations that developers will need to work with if they decide to target the older version.

On the other hand, since most devices won’t get 4.0 for some time, and that the majority are on 2.3.x, developers would be working with only two or three API levels behind. After all, levels 11-13 are reserved for tablets running Honeycomb (3.x).

Speaking of Android tablets, they make up only 3.3% of the active installed base in the last two weeks.