Friday, October 31, 2008

comScore: Low(er) Income Households Adopting the iPhone as Times Turn Tough

You'd think that the majority of iPhone buyers would be in higher income ranges, and while that may be true, a new study by market research firm comScore indicates that low(er) income folks are adopting the iPhone, using it as a sort of Swiss-Army Knife in terms of gadgetry, while cutting back their spending on standalone electronics.

The iPhone could be used as a phone, a music player, a camera and a way to connect to the Internet. Of course, without a tethering app, you're stuck looking at the Web in a relatively small screen --- OK for short sessions, but it would drive me crazy if that's all I had.

The study reports on the demographics of iPhone users for the first time. While 43% of iPhone owners earn in excess of $100,000 annually, the study indicated that the strongest growth in users is coming from those earning less than the U.S. median household income.

iPhone adoption since June 2008 rose 48% among those earning between $25,000 and $50,000 annually and by 46% among those earning between $25,000 and $75,000. According to comScore, this is 3x the growth rate for those making more than $100,000 annually, while overall, iPhone penetration grew 21%.

Jen Wu, senior analyst, comScore, the report’s author said:
"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. 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."
The study tracked changes in comScore's monthly online survey of 33,962 mobile-phone users. It should be noted that while the 48% jump in the 25 - 50K range is big, the sheer numbers themselves, 266 - 394, are not.

Also among the 25 - 50K range, however, the number of people accessing news and information via their mobile browser grew by 5% since June, while the overall market grew by 3%. comScore also reported, among that same 25 - 50K range, a 6% growth in mobile e-mail usage (vs. 8% overall) and 5% growth in mobile music consumption (vs. a drop of 0.3% overall).

Mark Donovan, senior analyst, comScore said:
"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. 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."

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