Why can't I restore apps to iPhone 5 from 4s?

I had the same issue (I use iTunes on Windows 7). I Bought a new iPhone 5 and used the Backup / Restore method to move my stuff from the old iPhone 4S to the new one. The process only restored all the Apple apps, plus Contacts, Phone Calls, and Messages. When I tried to backup again - hoping it would restore the rest - it went through a restore process in iTunes (for about 5 minutes) and then I got the message that my iPhone will restart but never did (I had to restart it manually).

What I also noticed was that, when I retried, the Backup seemed to be very quick.

I called Apple Support who said that there is a problem with the Backup process. I would be able to restore my Apps via the Purchased Apps process but I would lose all my user data (such as games progress). I was extremely frustrated because I use my iPhone and iPad as tools, not game devices.

I went to the App Store on the iPhone and started downloading some of the Purchased apps from the what seemed to be the iCloud. To my surprise, all app data was there (eg. WhatsApp chats, and The Vault data). I am not sure how this works because I never deliberatelly setup app backup on the cloud, but I suspect that the "Documents and Data" == "On" setting on Settings --> iCloud does exactly that, and in return does not include this information on the PC backup.

All seems fine now (at least for the apps for which I care and tried). The issue I still have is this uncertainty on what exactly is my iPhone doing and where is my stuff at any point in time.

Just a guess into the wild... All the apps you are trying to install have to be present on the source you want to sync from, which usually is either iTunes or iCloud. A backup usually does not contain content from the App-Store (like apps etc...)

This is what worked for me after some trial and error on iTunes 11: select "File" -> "Devices" -> "Transfer purchases from myPhone" from the menu bar. Then all your missing apps are transfered to your computer. After it is done you might want to refresh the backup of your phone, by clicking on "backup now" on the summary page of your phone. After that you should be able to setup your new phone with all the data from your old device. (Maybe reset the new iPhone first by deleting all the content on it via the settings app)

Apps purchased are not contained in the backup, therefore they will not restore. They can be found in your iTunes, under apps purchased and can be downloaded again to your device. Appdata however is found in the backup - it can be extracted with software such as iPhone Backup Extractor, and then imported back to the device. Hope this helps!

I believe the problem is in iTunes 11. I found, that on the Apps tab there is now missing "Sync Apps" checkbox. They believe, they have replaced this with iCloud. But only partially. If you would install applications you would find, that the data has been synced.

I have solved this by using my old PC with iTunes 10.7. I had to run the restore from my 3GS backup twice. I have wiped all data and settings and restored backup. This installed applications but not all settings (background I guess) and application order was preserved. Thank I have connected the iPhone again and restored again (but without wiping the data). Now my iPhone 5 has all the applications in correct folders with all its data. Strange restarts not corresponding to the instructions from iTunes were experienced too.