Are smartphone marketers smart enough?
Reporting on the International Consumer Electronics Show in Las Vegas (CES 2015), NPR reporter Aarti Shahani reviewed the cool new crop of low-price products and asked: “when it comes to smartphones, are Americans dumb?” It’s a provocative question.
Even more provocative: when it comes to Americans age 50-plus, is the smartphone industry smart enough?
The Pew Research Center reports over two-thirds (68%) of American adults owned a smartphone in December, 2014.
As expected, ownership is highest (80%) among people under 50. However, half (54%) of those aged 50-64 and a quarter (27%) of those 65+ already own one.
So with the low hanging fruit almost picked clean and the younger market almost saturated it’s time for smarter thinking about “old” people. The 50+ space is now key to future growth, not just for smartphones but for app developers and – especially – mobile advertisers.
Look no further than Pew’s tracking data January-December, 2014: while the under-50 segment eked out tiny growth, the ownership growth rate among people 50-64 jumped by 10% and among those 65+ it rocketed by 42%.
The $20+ Billion smartphone goldmine up for grabs
Plus ça change, plus c’est la même chose – the more things change, the more they stay the same. Written by French wit, Jean-Baptiste Alphonse Karr, in 1849, these smart words (how’s that for a segue?) still apply.
That same year, half a world away, the California Gold Rush erupted.
The easy pickings came quickly; many grew rich from what lay around just waiting to be grabbed. But the mother lode remained hidden underground, awaiting those savvy enough to think deeply.
Just a couple of hours from the 1849 diggings via a Tesla, gold fever repeated itself in Silicon Valley after Apple launched the smartphone industry. By the end of 2014, Nielsen reports that smartphones held a 77% share of all mobile phone sales.
With the shiny Millennial nuggets now harvested, mining the rich Boomer ore requires deeper thinking. Plus ça change …
For sure, older Americans – Boomers and their even older parents – will steadily go smart, helped along both by migration from previous mobile formats and the lower priced products described by NPR’s Ms. Shahani at CES.
So, reprising the big question, is the smartphone industry smart enough to engage the 50+ demographic? How about engaging just the Boomer generation, currently aged 51-69?
The Census Bureau reports the U.S. population aged 51-69 is 76.5 million – more people than live in the U.K or in France. Using Pew and Nielsen data (above) we connect to some impressive numbers:
- 66.7 million Boomers own a mobile phone
- At a 77% share, the smart potential is 51.6 million units
- Of these, 34.5 million are already smart
- Bottom line: 17.1 million new Boomer buyers are in play
But, in the VC-speak of “The Valley”, how do we monetize this?
The median cost of a smartphone – including phone carrier subsidized contracts and straight purchases – is around $550 (Forbes, Tristan Louis) but likely to drop to $400-$450 in the next few years. This translates to a potential Boomer market of about $7 billion in newcomer units and $14 billion as current owners renew, upgrade and/or switch brands … a $20B+ bonanza!
And, in addition to all that new equipment, there are amazing opportunities for other businesses in the ecosystem if – there’s always an “if” – marketers learn how to engage Boomers.
Smart marketer attitudes towards Americans over 50 are changing
Let’s not just pick on smartphone manufacturers; how about add two more disruptive questions?
- When it comes to engaging Boomers, are mobile advertisers smart enough?
- When it comes to Boomers, are app developers smart enough?
Unfortunately, we Americans over 50 do not rank high on the priority list in Silicon Valley or along Madison Avenue. Group-think claims we are too old to change our ways.
But, with $20+ billion on the table, smart adland and tech-world Millennials are beginning to rethink old theories from the Mad Men and Fortran punch card era.
And they are learning there are even more Boomers than previously realized. The Boomer-Plus Generation™, born 1940-1965, extends the market to 93 million. As a country, it would be the 3rd largest economy on the planet.
As for “unadaptable over 50,” just remember who launched the smartphone at age 52.
Come visit us to learn how generational smarts can be learned.