Tuesday, February 21, 2012

Fact of the Day: Even on Less Than $15,000 per Year, 56% of 18-24 Year Olds Have Smartphones

MashableTech -- "When a twentysomething’s budget is tight, her smartphone is far from the first expense to go, suggests a new study from Nielsen. The survey of 20,000 U.S. mobile customers found that smartphone ownership skews toward the young and the wealthy — exactly as you’d expect.  What is more surprising, however, is this nugget: smartphone penetration among young people in the lowest income bracket is higher than it is among older people in the wealthiest bracket. 

Among 18- to 24-year-olds, more than half of respondents who make less than $15,000 each year said they own a smartphone. This might be explained if the parents of many college-age students are footing their children’s phone bills. 

Still, even in the next oldest, post-college age group, the percentage of those in the same income bracket who own a smartphone was a mere 13% lower. Making less than $15,000 in a year doesn’t stop 43% of these 25- to 34-year-old mobile customers from paying for a smartphone. Meanwhile, fewer than 20% of respondents older than 45 who make less than $15,000 said they owned a smartphone."

45 Comments:

At 2/21/2012 2:12 PM, Blogger Walt G. said...

"It suggests that many young people count smartphones as a necessity."

Having a smartphone is cool. Being cool gets you laid. Fonzy would have had a smartphone, and I'm sure the 18-24 year-old group probably does not know who Fonzy is :)

 
At 2/21/2012 2:15 PM, Blogger Marko said...

I am thinking that most of these people are considered poor and are included in the ranks of those without health insurance.

The left also claims that minimum wage isn't a "living wage" so we must raise it. These people are so not starving they are making starvation wages and spending it on smart phones.

Poverty rolls - with smart phones. What a country!

 
At 2/21/2012 2:16 PM, Blogger Marko said...

Walt G - I don't think The Fonz would have had an iPhone though . . .

 
At 2/21/2012 2:18 PM, Blogger Jon Murphy said...

Well, also the smartphone can replace many things. It can be used as a phone, music player, Internet browser, game player, pocket computer, etc. all for a (realitively) small monthly fee. If people in this age group are indeed using a smartphone for multiple uses, then it may be replacing other electronics they cannot afford. What's I'd be really curious in is seeing how many features the different age groups use.

 
At 2/21/2012 2:24 PM, Blogger juandos said...

marko says: "Poverty rolls - with smart phones. What a country!"...

Your comment reminded me of this picture...

 
At 2/21/2012 2:35 PM, Blogger Walt G. said...

When I was that age we thought cars were a necessity, but now smartphones rule the teenage conversation and cars are just an afterthought. Maybe that's because we left home by our late teens and this generation leaves home in their late 20s--if at all.

 
At 2/21/2012 2:39 PM, Blogger Larry G said...

don't forget that many other countries with even lower overall standards of living have cell phones also and those phones have been instrumental in overthrowing despotic governments.

it would be interesting though to see what would happen if rules were put in place that prevented welfare or unemployment benefits to be spent on smartphones or smartphone cell services (data plans).

 
At 2/21/2012 2:39 PM, Blogger Larry G said...

This comment has been removed by the author.

 
At 2/21/2012 5:20 PM, Blogger Ron H. said...

Walt: "When I was that age we thought cars were a necessity, but now smartphones rule the teenage conversation and cars are just an afterthought. Maybe that's because we left home by our late teens and this generation leaves home in their late 20s--if at all."

At least we could live in our cars. I imagine a smartphone serves a similar purpose today by allowing owners to make lots of calls until they find someone with a car they can sleep in. :)

 
At 2/21/2012 5:24 PM, Blogger Ron H. said...

"it would be interesting though to see what would happen if rules were put in place that prevented welfare or unemployment benefits to be spent on smartphones or smartphone cell services (data plans)."

Yes. That's exactly what we need - more rules and regulations.

Actually, there's little doubt that he same black market activity would occur as occurs now with food stamps not being usable to purchase alcohol.

 
At 2/21/2012 5:27 PM, Blogger Hydra said...

Maybe 56% of 18 -24 year olds suffer from an impaired ability to set priorities.

 
At 2/21/2012 5:30 PM, Blogger rjs said...

the same in true in india:

By March 2010 the country had 584 million mobile subscribers, up from 350 million just 15 months earlier. The mobile market was continuing to expand at an annual rate in excess of 40% coming into 2010

http://en.wikipedia.org/wiki/Communications_in_India#Mobile_Telephones

 
At 2/21/2012 5:36 PM, Blogger Dimitri Mariutto said...

More pertinent would be to know how many of them actually pay for their own smartphones instead of just having one.

 
At 2/21/2012 5:50 PM, Blogger Ron H. said...

"Maybe 56% of 18 -24 year olds suffer from an impaired ability to set priorities."

It's more likely an income thing than an age thing. Maybe 56% of those making less than $15k/yr suffer from an impaired ability to set priorities.

 
At 2/21/2012 5:52 PM, Blogger Ron H. said...

"More pertinent would be to know how many of them actually pay for their own smartphones instead of just having one."

Yes. Maybe 56% of 18-24 year olds making less than $15k are also full time dependents.

 
At 2/21/2012 6:01 PM, Blogger sethstorm said...

No wonder the phones are low quality.


The left also claims that minimum wage isn't a "living wage" so we must raise it. These people are so not starving they are making starvation wages and spending it on smart phones.

The phone issue aside, those starvation wages are from business thinking it can play the divine.

 
At 2/21/2012 6:02 PM, Blogger sethstorm said...


Yes. That's exactly what we need - more rules and regulations.

Actually, there's little doubt that he same black market activity would occur as occurs now with food stamps not being usable to purchase alcohol.

With aggressive enforcement and a backstop of anti-circumvention, such improper markets can be made historical.

 
At 2/21/2012 6:46 PM, Blogger Ron H. said...

"With aggressive enforcement and a backstop of anti-circumvention, such improper markets can be made historical."

OK, maybe you can explain how you would prevent food stamp recipients from selling their food stamps at a discount for cash, and using the cash to buy alcohol?

Keep in mind that it is illegal for a grocer to ask a food stamp presenter to identify themselves.

While the use of a charge type card may reduce the incidence of grocer fraud, it does little to prevent such fraud by other individuals.

 
At 2/21/2012 7:26 PM, Blogger Che is dead said...

Poverty rolls - with smart phones. What a country! -- Marko

Last year, a federal program paid out $1.6 billion to cover free cell phones and the monthly bills of 12.5 million wireless accounts. The program, overseen by the FCC and intended to help low-income Americans, is popular for obvious reasons, with participation rising steeply since 2008, when the government paid $772 million for phones and monthly bills. But observers complain that the program suffers from poor oversight, in which phones go to people who don't qualify, and hundreds of thousands of those who do qualify have more than one phone. -- Yahoo News

 
At 2/21/2012 8:01 PM, Blogger kmg said...

Yet another example of how even the 30th percentile people today have it better than the 90th percentile people of 1980.

Moore's Law has gained a factor of 2,000,000 since 1980. Sure, it only affects 2% of your life, but that 2% gained 2,000,000.

 
At 2/21/2012 8:21 PM, Blogger sethstorm said...


Yet another example of how even the 30th percentile people today have it better than the 90th percentile people of 1980.

While you're part of the folks that try to trivialize things just because there's shinier and more featuresome junk.

 
At 2/21/2012 10:04 PM, Blogger sethstorm said...


OK, maybe you can explain how you would prevent food stamp recipients from selling their food stamps at a discount for cash, and using the cash to buy alcohol?

Keep in mind that it is illegal for a grocer to ask a food stamp presenter to identify themselves.

Require some sort of positive & tamper resistant identification for each person for each transaction, as one might be asked for other transactions. Not sure what it'd look like, but the goal would be to make the cost of fakes too high for the welfare crowd.

While one should not have to announce it, the lax identification requirements are one force behind that fraud.





While the use of a charge type card may reduce the incidence of grocer fraud, it does little to prevent such fraud by other individuals.


Encourage cooperation with card processors to transparently identify places that are eligible and those that are not. Places that are not eligible could mark "Food item" all the live-long day and end up with transaction denied.

 
At 2/22/2012 12:33 AM, Blogger kmg said...

While you're part of the folks that try to trivialize things just because there's shinier and more featuresome junk.

Rather, you are part of the pessimistic gloom-cult who obsesses over the few negatives while overlooking larger positives.

You disagree with the basic premise of this blog, btw.

Some commenters on Econ blogs are people who covet money, but don't have much talent for making it.

 
At 2/22/2012 11:10 AM, Blogger morganovich said...

isn't this sort of a BS stat?

inherent in this argument is the assumption that they paid for them and or pay their own cell phone bill.

i suspect that is not true of the vast majority of them. they got it from christmas or a birthday.

their parents pay.

thus, their own income is irrelevant.

most kids have lots of stuff they could not afford themselves.

my niece is 4 months old. she has a crib, loads of clothes, toys, blankets, you name it.

is her income relevant?

 
At 2/22/2012 1:39 PM, Blogger morganovich said...

also:

grammar question:

"less than $15,000"

is that correct usage?

generally, you use fewer if it can be counted, and less if it cannot.

there is an exception for singular but discretely quantifiable nouns, but i do not think it applies here.

turnabout is fair play mark.

 
At 2/22/2012 3:00 PM, Blogger Ron H. said...

"Require some sort of positive & tamper resistant identification for each person for each transaction..."

Great idea! A number tattooed on their forearm would probably do the trick.

 
At 2/22/2012 3:09 PM, Blogger Ron H. said...

"Not sure what it'd look like, but the goal would be to make the cost of fakes too high for the welfare crowd."

You don't understand. (sorry about the understatement) There is nothing fake involved. I can sell my food stamp card to someone else for cash. That transaction is untraceable. The new owner of the card can use it to buy food without being required to identify themselves. The card is as good as cash, and it's not the job of the grocer to police eligibility.

Do you feel as strongly about folks getting unemployment compensation? Should they have to prove their eligibility to a grocer?

 
At 2/22/2012 3:13 PM, Blogger Ron H. said...

M: "my niece is 4 months old. she has a crib, loads of clothes, toys, blankets, you name it.

is her income relevant?
"

She is compensated for cuteness, and has the ability all helpless infants have to subjugate all but the most hard-hearted adults.

 
At 2/22/2012 3:34 PM, Blogger Ron H. said...

"Encourage cooperation with card processors to transparently identify places that are eligible and those that are not. Places that are not eligible could mark "Food item" all the live-long day and end up with transaction denied."

LOL!

"Encourage cooperation with card processors."

Translation: "hold a gun to their heads"

The holder of a food stamp card is eligible to buy food at a food store, and that's exactly what the holder is doing. What transaction are you trying to deny?

You seem to be missing the simplicity of this. If I am eligible for food stamps, I get a card similar to a cash card that can be used to buy food but not alcohol.

If the card is worth $100, I can sell it to someone for $60 cash, and then I can spend the $60 on alcohol, or anything else I want.

The new owner if the card can buy $100 in groceries for which they have paid $60.

Both of us are getting something for nothing - if you ignore the taxpayers.

Why is this difficult for you to understand?

Even if positive ID WAS required, I could go to the store with my business partner, buy their selections up to $100, then outside the store transfer the goods to them for $60.

You can't eliminate this type of activity, you can only make it more expensive for the taxpayers.

 
At 2/22/2012 8:11 PM, Blogger VangelV said...

This might be explained if the parents of many college-age students are footing their children’s phone bills.

Yes, it can be explained that way. The funny thing is that most families today spend much more for telephone services than they did in the past even as the 'deflation' element is played up by all of the reporting agencies.

 
At 2/22/2012 8:12 PM, Blogger VangelV said...

Poverty rolls - with smart phones. What a country!

It is not unusual. The last time I was in China the beggars and farmers were using cell phones and wearing Nike shoes.

 
At 2/23/2012 1:38 AM, Blogger Ken said...

"Yet another example of how even the 30th percentile people today have it better than the 90th percentile people of 1980."

While you're part of the folks that try to trivialize things just because there's shinier and more featuresome junk.


Yep all that more "featuresome" medicine, housing, cars, food is "junk". All those "featuresome" digital tools reducing information symmetry, reducing overhead, reducing inventory, improving tolerances, etc, all reducing the price of everything (which helps the poor more than any other segment of the population) is "junk". All those "featuresome"... well that could go on for a while, so I'll just stop there.

Seth, you really are an idiot everywhere and always, amaright? In 30 years, when those in the 30th percentile in 2042 live like those in the 90th percentile in 2012, be sure to remind everyone of all that shiny "junk" those in the top decile had in 2012 that you, and all the left, cried was necessary to live. Your tried and failed "solution" is to pathetically call (again) for a "living" wage. That way even more people can be priced out of the labor market and kept dependent on government handouts rather than working for a living, gaining valuable work experience to get a higher wage, then leaving poverty for good.

 
At 2/23/2012 3:03 AM, Blogger Paul said...

I've read of how shocked European elite were at poor Americans wearing suits and thinking at addressing the elites as equal. Will Rodgers said we were the first nation that drove its self to the poor house. Oh the horrors of America!

I'm well over 50 and dumped my landline, TV, internet, all for a smartphone at 1/4 of the monthly cost.
Further, for dating for young people, finding jobs, selling and buying, getting rides, comparitive price shopping via bar codes and apparently like Google Shopper and online coupons. Lastly, what phone isn't a smartphone now? I pay 25$/mo for unlimited data/text and 300 anytime voice.

 
At 2/23/2012 3:48 AM, Blogger Brian McKim & Traci Skene said...

The phones are low quality?

The owners are suffer from an impaired ability to set priorities?

These are some of the squarest, out-of-touch comments I've ever seen on a blog.

Smartphones are the highest-quality, most versatile, most powerful appliances ever--EVER-- manufactured in the history of this planet.

I speak as a 54-year-old who only saw fit to own one starting two years ago.

I renewed my contract with a Droid 3 just last month and I will probably never be without such an instrument for the rest of my life.

A smartphone is not merely "cool." It's wickedly powerful and disruptive. As one commenter said, it replaces a half-dozen or more other gadgets, all of which are, while not necesary, important and useful and empowering tools.

The revolution is happening gradually. But there are some who will be left behind.

I worry that Cash For Clunkers may deprive an entire generation of cheap wheels. But at least a lot of those deprived twenty-somethings will be up to speed when it comes to communication, connectivity, organization, photography and entertainment.

 
At 2/23/2012 7:00 AM, Blogger Holy Loch Sailor said...

Among 18- to 24-year-olds, more than half of respondents who make less than $15,000 each year said they own a smartphone.

Does this stat really mean anything? How many of these have their own accounts or, if they have an account in their name, how many pay for it themselves.

My 24-year old son is still a full-time student and does not break the $10k line, but has one of the smart phone clones. He only has it because it is the single thing that his mother provides for him. As the second phone on the account, it does not cost all that much.

 
At 2/23/2012 7:07 AM, Blogger Holy Loch Sailor said...

To ramble on...

I provided a phone to my older son when he lost his job, not because he wanted one, but because I wanted him to have one. (He's got a better job now, thanks much) That 2nd phone did not add much to my bill.

I am a middle age guy that would love to dump on today's yout's as much as anyone, but this isn't one of their failures.

 
At 2/23/2012 7:32 AM, Blogger Larry G said...

"dumped my landline, TV, internet, all for a smartphone at 1/4 of the monthly cost"

Paul - do you "key" info like blog posts in your smartphone or do you use it as a hotspot for a laptop or use WiFI, etc?

do you no longer watch TV?

are you essentially off TV/Internet except for smartphone?

 
At 2/23/2012 8:08 AM, Blogger Bandit said...

If you don't have a smartphone how are you going to film the next chick gang beatdown in the 'hood?

 
At 2/23/2012 8:16 AM, Blogger VangelV said...

I've read of how shocked European elite were at poor Americans wearing suits and thinking at addressing the elites as equal. Will Rodgers said we were the first nation that drove its self to the poor house. Oh the horrors of America!

That was a time when the State played a very small role in economic life and the regulatory environment was not getting in the way. That was the time when poor and rich alike purchased cars and consumer items with cash and were not burdened with massive debts that they had little chance of repaying.

I'm well over 50 and dumped my landline, TV, internet, all for a smartphone at 1/4 of the monthly cost.

That is good for you but people who have TV, internet, and land lines find that the costs have gone up, mostly because of taxes. If you give up cable your cost of cable goes to zero. But that does not mean that the cost of cable for those who still use it has fallen to zero.

Further, for dating for young people, finding jobs, selling and buying, getting rides, comparitive price shopping via bar codes and apparently like Google Shopper and online coupons.

Dating for young people? Has that really 'improved' because of cell phones?

Lastly, what phone isn't a smartphone now? I pay 25$/mo for unlimited data/text and 300 anytime voice.

It is clear that technology is making huge advances. It is clear that competition in unregulated sectors is bringing costs down significantly. But that does not mean that the cost of living is much lower than it used to be. The average American family has had to place an extra body into the work force, work many more hours, and rely on debt to finance its standard of living today. You now have 1 in 14 people on food stamps, senior citizens who still have mortgages, and young people leaving college with a hundred grand of student loans. Technology does not seem to have helped them live more secure lives.

 
At 2/23/2012 11:03 AM, Blogger morganovich said...

paul-

"i pay 25$/mo for unlimited data/text and 300 anytime voice."

in what decade?

that seems very, very low.

the major carriers will not even sell you the voice part of the plan for that anymore and almost no one offers unlimited data and those that do tend to have terribly limited networks.

i have 900 minutes and unlimited data from VZ and pay $114 a month, which is a far better deal than any offered by them now.

your plan seems wildly off the cost curve from any i have seen since about forever.

it is really old or some weird carrier?

 
At 2/23/2012 1:11 PM, Blogger Gerad Hibbs said...

Virgin Mobile (MNVO for Sprint) $25 for that plan. Just have to buy a phone for cash. You can now buy an android smart phone for less than $200 (not top of the line but perfectly functinoal) and get that same plan for $35

 
At 2/23/2012 2:13 PM, Blogger morganovich said...

gh-

sure, but have you tried to use it?

that was my point about smaller operators. the coverage stinks and data speeds tend to be poor.

no way can they support a serious network on that.

perhaps it's like buying a kia instead of a bmw.

it does look cheap, but i am very doubtful that it would work well.

 
At 2/23/2012 4:20 PM, Blogger Jon said...

Let's not pat ourselves on the back too much just yet. 50 million Americans are food insecure. We are setting records in severe poverty. Severe poverty in the US is defined as getting by on less than $100 a week.

 
At 2/24/2012 1:49 AM, OpenID Sprewell said...

Speaking of wireless plans, I just picked up a $100 Android phone without a contract, along with unlimited data and 100 voice minutes/month for $30/month with no long-term contract, so I can cancel at any time. I don't use the "phone" part of the smartphone at all, so the 100 minutes should suffice, plus I'm tech-savvy enough to install a VoIP client on my phone and use that as needed. I'd rather have gone with this new provider because of their excellent pricing options, but it would have cost me the same or a bit less and the Sprint data network they're using is slower in my town, so I went with T-mobile instead. I love the metered model Ting is using though, so I'd like to buy their service at some point.

One big point that most are missing, even though Paul pointed this out, is that a cell or smartphone replaces a landline for many, particularly the young. I got rid of my landline more than a decade ago and have only had cell phones since. If the point of the original post is only that they could get a cheaper "feature" cell phone instead of a smartphone, why bother when smartphones are killing off the feature phone and you can get cheap smartphones too? Also, mobile data is now indispensable for anyone who isn't old and computer-challenged and you need a smartphone to interact with your mobile apps and data. The total expense for my aforementioned plan is less than $500 for the year, well worth it even if I were living on $15k or less.

Jon, you don't know what "severe poverty" is. Go visit the third world sometime and maybe you'll realize what a joke it is to say that about almost anyone in the US.

 
At 6/13/2012 1:06 PM, Blogger sparkle said...

Smartphones isn't the issue. I have one, its my only phone. I paid less for this than other not smartphones costs. Plus I bought it before my income went down. So don't put down owners of smartphones till you know their stories !!

 

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