As we prepare for the iPhone 5 announcement, hardware should really be the least of our concerns. The iPhone will undoubtedly have 4G/LTE connectivity, a faster processor, upgraded RAM, a smaller dock connector and larger battery, but to modify James Carville’s successful slogan used in Bill Clinton’s 1992 campaign, “it’s the apps, stupid” that really matter.

We are entering an era of incremental change in the smartphone industry. With smartphones at a comfortable plateau for developers, what will really dictate success is what mobile platform gets the cutting-edge apps and who gets them first. By being first, it creates a snowball effect that brings early adopters and influencers to the platform. As more influencers migrate, so will more developers and so on.

Android has increasingly allowed more API access to developers over iOS. By allowing them to communicate with parts of the device typically unavailable to iOS, Android may appear more attractive to the development community. Developers have always been a strength of the iPhone since its inception in 2007, but as Android allows them more access, they could shift their focus away from iOS, and develop on Android first. In turn, bringing developers, influencers and early adopters with them.

Android’s biggest challenge is its fragmentation. Most of it stems from the variety of modulated versions of Android. Not only are they not maintained by manufacturers, but they are usually built off of legacy versions of Android and stay that way. Because Android itself is held hostage by its manufacturers modifications (HTC Sense, Motoblur, and TouchWiz), this makes it very difficult for Google to remotely resolve core OS problems that could impact the development community. Apple doesn’t have this problem, which still gives it a leg up moving forward with developers.

Google’s open-source nature gave them market share early, but could hurt them late. So look for Google to push its Nexus line hard this year, potentially migrating the ecosystem completely in-house by 2013. Regardless, as phones move to quad-core processors and 2 GB of RAM, look for them to stay that way for awhile. The next leg of the smartphone war will be fought over the development community and the functionality of core OS, not hardware.