Room to grow: 83% of Americans don't own a smartphone 36
Mon, 04 Oct 2010 9:31 am EDT 
Currently, 82% of Americans own a cellular phone, and we expect that number to grow closer and closer to 100% over the next several years. But the device category we talk about most here on the sites of the Smartphone Experts network is underrepresented: according to a survey of some 37,000 individuals by Forrester Research, smartphones are only in the hands of 17% of Americans. If you do the math, that means there are 255 million potential customers wandering around in the space between Canada and Mexico (plus Alaska and Hawaii, of course) without proper mobile digital connectivity.
Now before you go and tout that more younger people own smartphones than older less tech-saavy Americans, think again. Forrester’s survey indicates that the ratio is roughly the same among members of Generation Y (18-30) and Generation X (31-40) as the general populace. And only one quarter of Americans have an unlimited data plan to supplement their phone; less than half have any mobile internet access at all.
We’re saddened by the number of Americans that don’t own smartphones, but by the same token we’re also encouraged by the potential size of the market over the next several years. There was a time when only a small portion of Americans owned computers, or had in-home access to the internet. Or owned a car, for that matter. Times are changing and more technology is finding its way into the homes, pockets, and hands of the people.
So what’s the problem? It’s the value proposition: smartphone makers are still running into hurdles convincing typically spend-happy Americans that it’s worth the extra initial cost and monthly charges to upgrade to a smartphone. Apple has experienced some success in making that case, and it’s an area where Palm and HP have struggled recently. But if that case can be made, the explosive growth the smartphone industry has experienced over the past few years will pale in comparison to the coming decade.
Source: Forrester Research; Via: CNN; Thanks Mannyman!
36 Comments
Most Americans don't own a smartphone because most Americans don't need a smartphone. Very few of us have the genuine desire for that kind of convergence, the rest are perfectly happy with just being able to call/text in more places than a landline. Fewer people that you'd think use online/shared calendars, task lists, etc., so the need just isn't there.
As for Apple, they've convinced no one of anything, they simply employ a marketing juggernaut to make people think they want what Cupertino is peddling. No one bought the iPhone because they'd been waiting for a smartphone.
I own two! Pre & Blackberry
Palllmmmm we need kick ass hardware
"We
Well yes, that sucks too. But food on the table is not out focus here - it's Palms in hands.
But it makes you sad? really? It evokes emotion? Wow.
Jobs and food aside, I suspect that the vast majority of adult cellphone-using Americans don't have smartphones because they don't want or need them enough to justify the extra costs. It would be sad if people from this demographic went out and started spending the money for smartphones they don't need just because "everybody else" does.
I think it
yeah i thought the exact same thing. "Really?" "Saddended?" come on!
and the biggest problem is the mindshare for webOS is not there.
Derek,
To get into the "older less tech-savvy" demographic, I think you would need to look more at the 41-50 crowd. I would be interested to see how the Baby Boom generation plays into this. Especially as I am in that group, albeit more toward the tail end.
Thanks for all your effort.
This calculation is a bit uneducated. It is like saying that only 4% of American automobile owners own sports cars. That leaves the market for sports cars manufacturers wide open and Ferrari is well placed to move into that market.
For the most part, most of those non-smartphone owners do not need heavy-duty smartphones. What features of smartphones must they have? Email? Social connectivity (Facebook, MySpace, Twitter)? Texting? Web browser? I just picked up a LG Remarq for my son. On that "feature phone" he can do all of the above. The only thing he can't do is GPS, but heck what does a 13 year old need GPS for (and there are plenty of other "feature phones" that can do GPS too).
I think what you will see is that these feature phones will become more and more powerful to fill in the gap for many who don't want to drop serious coinage for all you can eat data and messaging plans, not to mention a couple hundred bucks on the phone itself.
+1000
I've been saying this in response to anyone who says that Palm and HP don't need to worry about getting a device out. Because the market is so open, they can come in at any time, and have a huge market waiting. You said it very well. Not saying that the smartphone market isn't growing, because it is. Incredibly fast. Which is why speed and timing are everything here. Getting a device out asap is incredibly important. Unlike this article implies, there are not 255 million potential customers. And the customer base that is still up for grabs or coming up are going to join the game looking for household names like Apple, Android, Blackberry.
Just sayin.
My 13 needs GPS so I can keep a tabs on her location w/ Sprint Family Locator. That's just me tho..
OK, my 16 year old daughter has a 1.5 year old LG Lotus that has GPS on it (and can do all the other things as well).
Again, there is no need for a smartphone just to get GPS.
Counter points
Except the sports car market isn't growing fast.
As small as the current market is, both Apple and android devices are already making tons of money.
Feature phones don't have the ease of use of smartphones or will they be as feature packed at social networking, browsing, etc.
Data plans are becoming tiered. ATT has them and Verizon is following with lower priced entry plans.
Doesn't matter the car. The point he is making is valid. That there is an assumption that everyone wants or needs a smartphone. they don't.
same as people complain about the ipod touch saying just get an iphone. A lot of people don't need or want an iphone let alone the added monthly bill.
Take coffee everyone doesn't drink coffee. That doesn't mean starbucks is likely to convert all of them to coffee drinkers. it could but i doubt everyone will be coffee drinkers.
Fine, say the LCD/Plasma/whatever TV market. This is growing fast, but that doesn't mean that HP could just decide to start making LCD TVs and that they are guaranteed a huge market to sell to. They first have to overcome the bad publicity that Palm has gotten in regards to build quality, and no new hardware for almost two years.
Yep Apple and Android are making money had over fist. Android because they have a ton of devices flooding the market across all major carriers with upgrades to those devices coming out monthly. Palm has a two devices and has not upgrading either in a year. Apple, many people argue has a single device, but this is not true. Apple goes from the little Nano, to other iPods, to the Touch, to three versions of its iPhone. Sure not all of the them are smartphones, but the point is you can pick your device for what functionality you need.
Sure feature phones don't have the ease of use, why do you think they are a fraction of the price? My Saturn doesn't have the "ease of use" of a Lexus that can park itself, but I sure as heck paid a lot less!!
Sure Data plans are becoming tiered -- this would lead people to feature phones instead of smartphones. If you are going to put a limitation on data, you do not want a phone that gobbles up cookies like Cookie Monster -- you want one that sips data.
I think the way hpalm markets their new phones is the key... If they show y ppl might need a smartphone, we might get more attention
@morrison0880
True, but Palm still managed to add 200,000 more users last quarter with basically "0" marketing and 12+ month old devices. So we're not "completely" out of mind.
(Remember, people are still "blown away" when the see WebOS in action and not 4 weeks ago I 'sold' my 14th Pre with just a quick 5-min demo.)
You keep touting that number as if it really means much. 200K for palm is what, ~5% new consumers? The only player that took a loss in customers is windows mobile. Apple, RIM and Google all took in ~13%, ~24% and ~65% new consumers respectively. In other words, they all (except microsoft) saw growth of (roughly) 600K, 1.2M and 3.3M respectively despite losing marketshare. Stop pretending Palm's 200K means much in this market. Also, stop pretending that Palm is not marketing because I still see adds in print, on TV and here them on the radio. Lastly, stop pretending things aren't...urgent for HP/Palm at this point.
And it will stay that way for a long time because the prices of data plans are too expensive for most people.
Derek,
Not enough negativity in this post. Just kidding.
I think the PC comparison is best. Most of us older geeks saw this when we were the only ones with personal computers on the block. Today, little kids, our non-tech-savvy neighbors, even our parents, have laptops and desktops that are exponentially cheaper as they are more powerful, than what we geeks started out with. This holds well with most everyone we know in our respective tax brackets. Most phones will become "smart-phones" due to commoditization of expensive parts, and the convergence of our work/study,play,zone-out activities. When true mass market approval decides the winners (a few mobile OS makers) it will be like deciding the winning manufacturer of toasters for lack of a better who-cares-who-makes-it product.
Hopefully the casualties of a shakeout that happened with the PC market can be avoided for awhile, where many market losing yet wonderful technologies (amiga,atari,be,next, etc.) died a sad free-market death. Lets enjoy the competition and differentiation between makers while it lasts.
On the other hand, the sooner the better as the fan-boy web-os vs. bb vs. android vs. ios noise mimics the linux vs. wintel vs. mac wars of years past, make the new generation look as much like un-sexed nerds as we looked back then.
Manny
I'm likely to be switching from a Sprint Pre to a non-smartphone with one of the no-contract companies. The only smart-phoney thing I really use is GPS with google maps (occasionally).
I don't need an expensive finicky phone. I need something that works. I had my fun with the Pre, but it's time to get something that I feel like I can actually rely on that doesn't have faulty buttons the day after my warranty runs out. And I've tried Android phones, that OS is confusing to me. iPhone, LOL yeah right.
I won't be as COOL anymore with a simple texting phone, but I'll be infinitely happier with sturdier hardware and better battery life.
I'd say most of us just pretend we need a smartphone after buying one so we can justify the cost of owning it.
Over the years, when people have been impressed by my various smartphone toys, their interest usually ends when I say what the data plan price is. Perhaps HPalm should consider introducing a pixi type device at a deliberately low, even subsidized price, for pay as you go users. It would get more non smartphone users on the webos mindshare bandwagon.
i'd like to see a poll of what those 80 nonsmartphone users think of several smartphones like the htc offereings, samsung, pre, iphone, blackberry.
some may be wondering if they can eat them
Personally, I'm fine with the majority of Americans not owning smartphones. Hopefully it'll keep unlimited data on my carrier for longer!
your cutoff of gen X at 40 kind of threw me, as a 42 year old i'm not sure where that would leave me, i thought i was gen X.
according to wikipedia, gen X is more like 29-49 while gen Y is 15-28
i've owned a smart phone since Treo 280g
+1. That's more like it. I'm 42 and people from our generation are in no way, shape or form Boomers. Also, when Generation X was all the rage in the mass media, I was in my mid-twenties.
I would only disagree with Wikipedia in that I have a hard time seeing a 29-year-old as a Gen-Xer.
my mom wants a phone but she doesn't want to learn how to use it
in my family we are four my mom has an old phone my dad a blackberry with walkie talkie my bro and android and I got the pre so the thing is that companys they are just making hard to use phones and not going on the simple to use ones like webos my mom never used my phone and 5 minutes she knew how to use it but she couldn't use the android haha
I'm 13 and I have a pre, and your saying that 83% don't own a smartphone? That's scary.
I currently have an HTC Hero Android Phone and can honestly say that I MISS my Pre...the only reason why Im using the hero is because my pre turns off by itself even if I dont touch it or move it at all. And that causes problems especially when I miss phone calls :P...Android feels REALLY clunky to me...and I never knew there was such a thing as "SAFE MODE" like that of a computer on android...apps seem to stall or crash a lot but there is a ton of apps available which is nice lol...I like that I can actually listen to my radio station though on android :)...I want to switch back once the next hpalm phone is released.
I don't know that there's a problem with the device itself. I think it's all about the costs that providers want us to pay for their tariff plans. You know how it goes, it's better to buy a smartphone with a tariff on it than to buy it alone. Therefore it's still to expensive. Just for the record - http://simtariff.com/ - a site definitely worth couple of clicks. You can compare tariffs and choose a cheaper one.
Clearly this writer needs to learn some basic math:
"Currently, 82% of Americans own a cellular phone, and we expect that number to grow closer and closer to 100% over the next several years. "
Small children, babies, and seniors will not all be carrying around a cell phone. There has to be some deduction for their numbers. The teen and adult market for cell phones is already saturated near 95%. The growth in selling new products is more features, and price competition to existing users. Smart phone sales will become a bigger piece of the pie as feature phone drop in availability and demand.