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How Does Household Income Affect Smartphone Use?

By December 16, 2015 No Comments

There is a perceived wisdom that low income earners are less likely to own or use a smartphone. This perception has an effect on the marketing strategies of businesses with a target consumer base within this demographic. But is the stereotype correct? Does smartphone use decline as household income does?

According to this year’s data by Pew Research Center, 64% of all Americans own a smartphone, including 50% of Americans with low household income (less than $30,000 a year). For 18 to 29 year olds, that number jumps even higher to 89%. For those with low income, 13% are identified as smartphone dependent, with little or no access to the Internet any other way, compared to just 1% of those with high incomes.

With RealityMine’s data we aim to show how mobile behavior differs between people with different household income levels and employment statuses. We collected and analysed USA TouchPoints eDiary data of 2,099 American panelists and the passive mobile data of 6,297. The eDiary data was collected between April 2014 and December 2014. RealityMine’s data is collected using a smartphone or tablet device, so these usage figures are higher than the population generally, therefore we examined usage types and levels throughout the household income brackets, rather than ownership.

Device use by income

Based on RealityMine data, 94% of people belonging in the lowest income bracket (household income less than $25,000) used a smartphone during the seven-day eDiary survey. It may surprise you that this percentage is exactly the same within the highest income bracket ($100,000 or greater), as seen in the graph below.

The common belief that the higher the income, the more smartphones are used, is not the whole truth. But interestingly, this does now seem to apply to the device choice, with tablet and computer usage more prevalent in those with higher household income.

The same trend is also seen when comparing employed and unemployed people – while they use mobile equally, employed people are more likely to use computer and tablet devices than the unemployed.

Device use by income

Low earning Millennials are particularly dependent on smartphones

The demographic data shows that income and age are related; Millennials are more likely to fall within low income brackets while older generations are more likely to have high income. 20% Millennials have a household income of less than $24,000 while 13% of Gen X fall in this income bracket. In comparison, only 10% of Millennials have a household income of more than $100,000 while 17% of Gen X and 22% of Baby Boomers belong to this income bracket. Considering the income differences by age, we also looked at mobile usage within age groups.

It appears that tech-savvy Millennials are avid smartphone users, no matter what their earnings. 96% of Millennials with a household income of less than $25,000 use a smartphone, and the percentage remains nearly the same in every income bracket within the generation. In comparison, tablet and computer usage is mainly dominated by Millennials with household income greater than $50,000. Therefore, lower income Millennials are more likely to be dependent on their smartphone for internet access.

Within Gen Xers falling in lower income brackets (less than $50,000), smartphone is also the number one device choice, compared to Gen Xers with higher income level (more than $50,000) who are more likely to use a computer (Figure 2). Baby Boomers, however, use a computer more actively than mobile regardless of their income level.

Device use by generation and income

How app usage varies between different income brackets

Interestingly, low income individuals were found to generally use downloaded apps much more than those within higher income brackets. The difference in usage was highest for communication and social networking apps. While only half of the panelists in the highest income bracket use communication apps, 71% of the people within the lowest income brackets use them.

Media, video, music and audio categories were also heavily dominated by those with a lower income (less than $50,000). This doesn’t necessarily mean that people with a higher income would view or listen to entertainment less, it may indicate that they prefer consuming media on other devices. Perhaps this phenomenon also explains the lower app usage within this demographic.

In conclusion, people with lower income are more likely to use apps on smartphones as this may be their only method to access the Internet. For these people, apps are also often used as a way to save money, with voucher and money saving apps featuring highly.