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Study Sees Ballooning iPhone Use Among Lower-Income Buyers

Study Sees Ballooning iPhone Use Among Lower-Income Buyers

As cell phones go, iPhones aren't exactly cheap, and neither is the data service they require. However, that hasn't deterred lower-income consumers from purchasing them, according to a recent study. Among U.S. users with lower-than-median incomes, the iPhone sometimes takes the place of amenities like wireline home Internet service or a new PC.

By Chris Maxcer MacNewsWorld ECT News Network
10/31/08 11:12 AM PT

Not all iPhone owners are among the most well-to-do Americans, according to a new report. While 43 percent of iPhone owners earn more than US$100,000 a year, the strongest growth in users is now coming from those who earn less than country's the median household income.

iPhone adoption since June 2008 rose 48 percent among those earning between $25,000 and $50,000 per year and by 46 percent among those earning between $25,000 and $75,000, according to a new ComScore report, "All about iPhone." Both those growth rates are about three times the growth rate of the device among higher-income Americans.

"As an additional household budget item, a $200 device plus at least $70 per month for phone service seems a bit extravagant for those with lower disposable income," noted Jen Wu, a ComScore senior analyst and author of the report.

"However, one actually realizes cost savings when the device is used in lieu of multiple digital devices and services, transforming the iPhone from a luxury item to a practical communication and entertainment tool," Wu added.

ComScore pegged the overall market growth at 21 percent for the iPhone from June to August.

Using More

Also, the number of people earning between $25,000 and $50,000 accessing news and information via their mobile browser grew by 5 percent since June, according to ComScore, while the market overall grew by 3 percent. Plus, ComScore is reporting a 7 percent growth in e-mail usage and a 5 percent growth in mobile music consumption among the demographic.

"These data indicate that lower-income mobile subscribers are increasingly turning to their mobile devices to access the Internet, e-mail and their music collections," noted Mark Donovan, a ComScore senior analyst.

"Smartphones, and the iPhone in particular, are appealing to a new demographic and satisfying demand for a single device for communication and entertainment, even as consumers weather the economy by cutting back on gadgets," he added.

Fighting for the PC

"We've noticed a number of different trends hitting the consumer market, even in this economy. One, the Internet has woven itself into the fabric of society at all different levels," Ben Bajarin, director of the Consumer Technology Practice for Creative Strategies, told MacNewsWorld.

"We've been noticing this struggle within the home for the Internet -- everyone wants to be on the Internet at the same time, but yet they have limited computers. There's generally one, sometimes two PCs in the home, and at the lower or middle tier, there's probably only one computer. So I think that's also playing a factor," he explained.

Of course, with the introduction of the iPhone 3G, Apple and AT&T not only brought faster Internet access speeds via the carrier's network, it also lowered the price of entry to $199.

"We wouldn't have seen this [growth] when the price was $399 and $499, and now that it's below that market price, I think it's stepped up for people who really saw the value in it and can now get it at the lower price point," Bajarin said.

"I don't think it's a computer replacement yet, but it gets you a fair amount of value and consolidated cost," he said, noting that the music, media, and entertainment features just "sweeten the pie in the overall cost analysis."


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