This is an article from Mobile Commerce Daily by Rachel Lamb (http://www.mobilecommercedaily.com/2011/05/20/61pc-of-wealthiest-americans-own-smartphones-study). The article references the AARC Spring 2011 survey results regarding use of smartphones among affluent Americans.

May 20, 2011
By Rachel Lamb

Approximately 61 percent of the 22 million wealthiest individuals in the United States own a smartphone, indicating a potentially untapped market for about 8 million smartphones, or 39 percent of the affluent, according to a recent study by American Affluence Research Center.

According to the data, 22 percent of those surveyed own a tablet, meaning that there is a probable untapped market 78 percent of the affluent. The study was able to dissect the ages and demographics of individuals, along with types of devices.

“There is so much talk about pervasiveness of mobile devices, but it’s important to understand who has these devices and how they are using them in order for people to market effectively through them,” said Ron Kurtz, principal of American Affluence Research Center, Atlanta. “It’s interesting that affluent have a smartphone or tablet, so clearly this is a medium in a way to reach people.

“It’s important to know what platform [marketers] need to be communicating through to be convenient and easy to access a brand’s information, and to receive or use an app,” he said.

Participants in the survey have an annual household income of $333,000 and an average primary residence value of $1.2 million. Their net worth is, on average, $3.1 million with investable assets of $1.8 million.

These are the top 10 percent of the wealthiest individuals in the U.S.

Dissecting the affluent

In addition to 61 percent of individuals who actually own a tablet or smartphone, it is said that about 65 percent of the affluent at least have access to smartphones or tablets.

The survey broke down the participants into demographics and type of mobile device used.

For instance, 84 percent of affluent individuals under 50 own a smartphone, whereas only 38 percent of those 60 and up own one.

The study also showed a correlation between income and type of smartphone.

Individuals who earn more than $200,000 per year are almost twice as likely to own a smartphone and have a slight preference for the BlackBerry.

Moreover, those with a slightly lower income, less than $200,000 per year, favor the iPhone.

The study did not see much difference in gender pertaining to preference and ownership of tablets, but four out of five individuals favored the iPad as their chosen tablet.

Predictably, younger individuals are more likely to own tablets and smartphones. Also, the increased likelihood to own a smartphone or tablet has a direct relationship with net worth and income.

Moving forward

Many luxury brands are reluctant to move their marketing into the tablet or smartphone sphere.

However, since 61 percent of the most affluent individuals in America have a smartphone, it seems like brands should be rethinking their strategy.

Some brands, even the most prestigious, are learning.

For instance, French fashion house Chanel is taking one giant leap for iconic luxury brands with the launch of two mobile-optimized sites for its fine jewelry and watch collections (see story).

Still, many luxury brands are beginning to understand the power of mobile applications, mobile-optimized sites and SMS messaging.

These are all ways that luxury brands can use smartphones and tablets to get in touch with their customer base, move products and build loyalty and relationships.

“The smartphone and tablet users are still younger users, which aren’t the absolute key demographic for luxury brands, but it’s a start,” Mr. Kurtz said. “Clearly, it is a channel to which the affluent are connected, though certainly a younger segment.

“Brands need to take this information into consideration and what they’re going to be offering and saying, how they’re going to be saying it and how much they’re going to be spending on these channels and on [mobile],” he said.

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About 65% of the affluent have access to one or more smart phones or tablets and another 34% have regular access to a computer according to a new Spring 2011 survey of the wealthiest 10% of US households by the American Affluence Research Center. Only 1% of the affluent lack access to the internet.

On average, 61% of the affluent own a smart phone and 22% own a tablet. With a population of about 22 million individuals in the 11.4 million households of the affluent, there is a potential untapped market for about 8 million smart phones (39% of the affluent) and 17 million tablets (78%).

The incidence of ownership of a smart phone, and the type of phone, can vary substantially within the age, income, and net worth groupings. For example, 84% of the under 50 age group own a smart phone versus only 38% of the 60+ age group. Those with $200K+ income are almost twice as likely to own a smart phone (73% versus 40%) as those with less than $200K income, and they have a slight preference for the Blackberry whereas the lower income group favors the iPhone.

There are minimal differences by gender for ownership and brand preferences of smart phones and tablets. Ownership of tablets and both tablets and smart phones increases as age declines and as income and net worth increase. The iPad is favored by a margin of 4 or 5 to one over other tablets.

About 18% of the affluent in the new Spring 2011 survey, the 19th in a continuing series of twice-yearly tracking studies by the American Affluence Research Center, own both a smart phone and tablet. Ownership of both is highest among those under age 50 (32%), those with income of $250K+ (25%), and those with a net worth of $6M+ (37%).

Half (50%) of the affluent with a mobile device and/or computer participate in one of more of the types of social media. On average, they participate in about 1.5 types of the social media listed. Participation in social media declines as age and net worth increase. Men participate a bit less than women because they are much less likely to participate in Facebook (33% versus 49%). LinkedIn is somewhat more popular among those age 50 to 59 and those with a $200K+ income.

As might be expected, owners of both smart phones and tablets are most likely (70%) to participate in some form of social media. On average they participate in 1.8 types of social media. Those with access to only a computer are least likely (69%) to participate in some form of social media.

Participants in the American Affluence Research Center Spring 2011 survey have an average annual household income of $333,000, an average primary residence value of $1.2 million, an average net worth of $3.1 million, and average investable assets of $1.8 million.

A description of the survey methodology and other detailed highlights of the survey can be viewed at:
http://affluenceresearch.org/most-recent-tracking-study/highlights-of-most-recent-survey/

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A record low level of spending by affluent consumers for home computer equipment is suggested by the most recent survey in a series of studies that began in Spring 2002.

Negative attitudes about the current economy and the economic outlook for the next 12 months are contributing to plans for reducing home computer equipment expenditures by affluent consumers during the next year, according to the Affluent Market Tracking Study #15 conducted by the American Affluence Research Center.

In the Spring 2009 survey of the wealthiest 10% of all U.S. households, spending plans for home computer equipment during the next 12 months, in comparison to their spending for such items during the past 12 months, are to be increased by 10% of the affluent consumers and to be reduced by 43% of the affluent consumers. The remainder (47%) expects to spend the same for home computer equipment during the next year as in the past year.

The survey respondents indicated a negative 12 month outlook for business conditions and personal household income. They also reported declines in their net worth, as a result of substantial declines in the value of their home and their investments/savings during the past two years. Together, these factors have contributed to a general attitude toward reducing or deferring expenditures in all areas.

The intentions to reduce spending for home computer equipment are consistent with the overall mood of the affluent market. Over 80% of the survey respondents reported that they had made a general effort to reduce or defer expenditures during the past 12 months, would make a conscious effort to do so during the next 12 months, or had both done so in the past and would continue to do so in the future.

The survey is representative of the population of the most affluent 11.2 million households in the U.S. that account for almost 40% of total personal income and two-thirds of the personal wealth of all Americans.

The 640 men and women included in the national survey have an average annual household income of $290,000, an average primary residence value of $1.2 million, an average net worth of $3.1 million, and average investable assets of $1.4 million. This survey of the affluent market has a maximum margin of error of five percentage points at the 95% confidence level.

These surveys track how affluent consumers assess current business conditions and their 12-month outlook for the economy, the stock market, personal household income, and their spending plans for different products and services that include major appliances, home computers, furniture/furnishings, home entertainment equipment, casual and upscale dining out, entertainment, recreation, domestic and international travel, designer and non-designer apparel, collectibles, fine jewelry, and political and charitable contributions.

* * *

Ron Kurtz is President of the American Affluence Research Center, which provides marketing research and mailing lists of affluent consumers to prominent companies targeting the affluent market.

AARC is an independent, private research organization dedicated to providing reliable marketing information about the values, lifestyles, attitudes, investments, and purchasing behavior of the most affluent segments of the U.S. population through both custom and multi-client surveys.

Ron’s experience includes over 20 years in senior management positions in the airline, hotel, and tour business. As the founding President of Sea Goddess Cruises, he created the product category of small deluxe ships for the very affluent. He also served as the chief marketing officer of four cruise lines, including Norwegian Cruise Line and Windstar Cruises.

Ron has been a key contributor to 6 start ups and 11 turnarounds of substantial businesses. He earned his MBA at Harvard Business School.

The American Affluence Research Center CONTACT: Ron Kurtz at 770-740-2200 or info@affluenceresearch.org. Website: http://www.affluenceresearch.org

Tags: Affluence Research, affluence surveys, affluent market, destination clubs, home computer equipment spending, luxury market
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