Low-income users latch on to iPhone

30.10.2008
Lower-income U.S. consumers are flocking to Apple's iPhone, sending an early signal that smartphones are changing from a luxury to a necessity, according to research company ComScore Mobile.

In a series of surveys ending in August, ComScore found that iPhone purchases grew fastest among people with annual household incomes between US$25,000 and $50,000. The growth rate in this group was 48 percent, compared with just 16 percent among people with incomes above $100,000.

Consumers in that lower-income group still made up only 15 percent of the iPhone crowd, which is dominated by affluent males between the ages of 18 and 35, the company said. But the fact that they are increasingly willing to pay $199 for an iPhone 3G and about $70 per month or more for AT&T's service plans suggests smartphones are becoming a mainstream product, said ComScore Mobile analyst Jen Wu.

"Although it's not shifting the iPhone audience all that much, it is still indicating a larger trend that we might be seeing more of in the future," Wu said.

The trend became most pronounced after the iPhone 3G arrived in early July, with higher speed, the App Store for third-party tools and a 50 percent price cut, she said.

Massive advertising, media coverage and word-of-mouth promotion are playing a role in attracting these users to the iPhone, but they may also see the device as a good value because of the number of things it can do, Wu said. Because it can be a music and video player, Internet access device, e-mail and instant-messaging platform, camera and many other things, the iPhone gives cash-strapped consumers more for their money than do single-purpose products, she said. And because it can be used on the go, it can help people make better use of their time, she added.