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10/31/2008
02:55 PM
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iPhone Adoption Fastest Among Penny Pinchers

Research shows that low-income groups are relying on smartphones for a range of communication needs.

Low-income earners are turning to smartphones, including the iPhone 3G, and mobile Internet use at a faster rate than higher-income earners, a new report shows.

The trend seems to mirror the leapfrogging seen in developing countries where consumers jump to mobile devices before landlines and desktops become common place. The reason behind the higher adoption rates among low-income earners in the United States appears to be the same as well.

"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," said Jen Wu, a senior analyst at ComScore, who wrote the report identifying the trend. "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's "All About iPhone" report found that people earning less than the median household income account for the strongest growth rate among iPhone users.

Since June, iPhone adoption has risen 48% among those who earn between $25,000 and $50,000 annually and by 46% among those who earn between $25,000 and $75,000 a year. That's three times faster than growth among those who earn more than $100,000 annually. Overall iPhone penetration grew 21%, according to ComScore.

Wu found that the number of consumers in the $25,000-to-$50,000 income range dropped slightly from June to August, but their ranks among smartphone owners and mobile content users grew -- in most cases above the rate of the overall market.

ComScore Mobile reported that the number of people earning between $25,000 and $50,000 accessing news and information via their mobile browsers grew 5% since June, while the market overall grew 3%. Mobile e-mail use grew 7%, and mobile music consumption grew 5%.

"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," Mark Donovan, senior analyst at ComScore, said in a statement. "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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