Either:
Your device is not running Android 2.3.6, or
Your application does not have this manifest, or
You are misinterpreting something, or
Your device or app is very strange
INSTALL_FAILED_OLDER_SDK should only occur if the API level of the device is below your android:minSdkVersion. In your case, android:minSdkVersion is 7, which is Android 2.1. Hence, you should not be getting this error.
