I just bought an ipad air and the versions of both itunes and icloud on it are too old to be able to restore from backup.  why would apple do this if it is not supported???

should I set it up as a new device?

I haven't done it. But if you set it up as new, just long enough to be able to update the operating system. Then go in and 'erase all content and settings'. This puts your iPad back to its out of box state, just not the operating system. You can then set your iPad up again, but this time you restore it from the backup of your old one.

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