When to use PNG or JPG in iPhone development?

PNG's are pixel perfect (non-lossy), and require very little extra CPU energy to display. However, large PNGs may take longer to read from storage than more compressed image formats, and thus be slower to display.

JPG's are smaller to store, but lossy (amount depends on compression level), and to display them requires a much more complicated decoding algorithm. But the typical compression and image quality is usually quite sufficient for photos.

Use JPG's for photos and for anything large, and PNG's for anything small and/or designed to be displayed "pixel perfect" (e.g. small icons) or as a part of a composited transparent overlay, etc.

Apple optimizes PNG images that are included in your iPhone app bundle. In fact, the iPhone uses a special encoding in which the color bytes are optimized for the hardware. XCode handles this special encoding for you when you build your project. So, you do see additional benefits to using PNG's on an iPhone other than their size consideration. For this reason it is definitely recommended to use PNG's for any images that appear as part of the interface (in a table view, labels, etc).

As for displaying a full screen image such as a photograph you may still reap benefits with PNG's since they are non-lossy and the visual quality should be better than a JPG not to mention resource usage with decoding the image. You may need to decrease the quality of your JPG's in order to see a real benefit in file size but then you are displaying non-optimal images.

File size is certainly a factor but there are other considerations at play as well when choosing an image format.

There is one important thing to think about with PNGs. If a PNG is included in your Xcode build it will be optimized for iOS. This is called PNG crush. If your PNG is downloaded at run time it will not be crushed. Crushed PNGs run about the same as 100% JPGs. Lower quality JPGs run better than higher quality JPGs. So from a performance standpoint from fastest to slowest it would go low quality JPG, high quality JPG, PNG Crushed, PNG.

If you need to download PNGs you should consider crushing the PNGs on the server before the download.

http://www.cocoanetics.com/2011/10/avoiding-image-decompression-sickness/