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iPhone rise spurred by less wealthy

The strongest growth in Apple Inc. 3G iPhone sales is occurring among consumers who earn below the median household income, according to comScore/M:Metrics.
While nearly half of iPhone owners earn more than $100,000 annually – the proverbial early adopters with high amounts of disposable income – iPhone adoption since June has grown 48% among consumers earning between $25,000 and $50,000 per year.
That growth rate is three times that of those who earn more than $100,000.
What the heck is going on here?

Cost consolidation
The price drop to $200, by many accounts, has reset consumers’ expectations of the price of entry to obtain high-end handsets that can deliver desktop-like capabilities. Adding at least $70 per month for a service plan to use the 3G iPhone, however, appears to add a major expense that may point to other drivers for the growth cited by comScore.
The cost of device and service “seems a bit extravagant for those with lower disposable income,” said Jen Wu, a senior analyst with comScore. “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.”

Web tool
In fact, comScore/M:Metrics found that in the study period – a rolling, three-month average taken in June, July and August – that consumers earning less than $25,000 accounted for 16% growth in iPhone sales, the same level of growth as that among consumers making more than $100,000.
Among those earning between $25,000 and $50,000, those accessing news and information via a mobile browser rose 5% since June, ahead of the handset market’s 3% growth. The same demographic’s use of mobile e-mail rose 7% and its consumption of mobile music rose 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,” said Mark Donovan, analyst at comScore. “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.”
Further data, of course, that captures iPhone and smartphone purchasing patterns in the critical months of September, October and November – as the economic downturn ran through housing, the financial markets and then employment – will be critical to comScore’s evolving thesis.

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