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Low Income Familes Purchasing iPhones, Affordability Plus

According to metrics company Comscore, Apple and AT&T’s plan to subsidize the iPhone, and drop the price so anyone can afford it, is paying off in spades. Lower income families are purchasing the affordable device, increasing Apple’s market share, bringing new users to AT&T’s network, and proving the overall push extremely successful for both companies.

iphoneincome

Comscore’s data explains that the largest amount of growth in users, is coming from families and customers earning less than the nation’s average household income. 43% of iPhone owners make more than $100k annually, so the revealing numbers are relatively surprising.

Since June 2008, iPhone adoption has risen nearly 48% amongst users earning between $25k and $50k per year. Similarly, iPhone adoption rose nearly 46% between those earning $25k and $75k per year. Putting it into perspective, these growth rates are over triple that of users earning more than $100k per year. Collectively, overall iPhone dominance and adoption grew roughly 21%. If Comscore’s data reveals anything, it shows how subsidizing a coveted product, dropping the price and making sure that anyone who wants one, can get their hands on one, was simply the move for Apple and AT&T.

“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, senior analyst, comScore, the report’s author. “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.”

Basically, people are realizing that $199 for a product that can take care of most of their digital needs, is actually a great bargain. Instead of needing multiple products to handle music/media, phone calls, and internet browsing, many are realizing the iPhone can handle all of those needs. “Lower-income mobile subscribers are increasingly turning to their mobile devices to access the Internet, e-mail and their music collections,” observed Mark Donovan, senior analyst, comScore. While the monthly charges might seem expensive at first, the introductory price of the actual handset, coupled with the “lower-stress” situation of having only one bill come each month, is what people are after. “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.”

Comments [1]

One Comment to “Low Income Familes Purchasing iPhones, Affordability Plus”

Larry W. @ October 31st, 2008 at 10:01 am
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this was exactly their goal with subsidizing the iphone… to get cheapies on board.

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