Financial Woes Plague the Smartphone Dependent

A fast-growing portion of Americans depend only on smartphones for Internet access, but nearly half of that group faces high rates of service interruption for financial reasons, according to a new study conducted by the Pew Research Center. This “smartphone dependent” group tends to be poor and non-White, Pew says, raising the possibility of a new kind of digital divide.

Pew’s survey found that 10% of Americans own a smartphone but do not have broadband at home, and 15% own a smartphone but say that they have a limited number of options for going online, aside from their cellphone. In all, 19% of American adults indicate that at least one of those conditions applies to them – making them dependent on smartphones for participating in the digital world. Critically, 13% of those with an annual household income of less than $30,000 per year are smartphone dependent, while just 1% of Americans from households earning more than $75,000 per year depend on their smartphones.

“For a fairly substantial proportion of the population, smartphones are definitely serving as a key utility for accessing all sorts of important information and services — and it’s quite clear that this access is often most tenuous or intermittent for those users who rely on that access the most,” said Aaron Smith, who co-authored the study.

The smartphone dependent group faces disconnection rates that are more than double the general population. Some 48% of the smartphone dependent group said they have had to cancel or suspend service due to “financial constraints,” compared to 21% of the general population, Pew found.

And those lower income households are far more likely to need smartphones to perform basic Internet tasks such as hunting for a job. Those earning less than $30,000 annually are nearly twice as likely to use a smartphone to look for information about a job — and more than four times as likely to use their phone to submit a job application, Pew said.

Trouble with smartphone bills occurs across economic and racial divides — some 23% of smartphone owners overall have had to cancel or suspend their service for a period of time because the cost was a financial hardship, Pew says, and 7% said they “frequently” experience higher-than-expected utility bills. Meanwhile, 15% said they frequently reach their data maximums.

But service interruptions are obviously a bigger hardship on those who rely on smartphones as their only connection to the Internet, a group Pew is dubbing “smartphone dependent.” Pew found that 12% of African Americans and 13% of Latinos are smartphone-dependent, compared with 4% of whites.

“Compared with smartphone owners who are less reliant on their mobile devices, the smartphone-dependent users are less likely to own some other type of computing device, less likely to have a bank account, less likely to be covered by health insurance, and more likely to rent or to live with a friend or family member rather than own their own home,” Pew found.

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The results come at a time when overall smartphone ownership has exploded. Fully 64% of American adults own a smartphone, up from 31% in 2011, Pew says. Smartphones are taking over as the main tool for Internet access for many users.

Pew found that smartphones are now routinely used for critical everyday tasks:

62% of smartphone owners have used their phone in the past year to look up information about a health condition.
57% have used their phone to do online banking.
44% have used their phone to look up real estate listings or other information about a place to live.
43% to look up information about a job.
40% to look up government services or information.
30% to take a class or get educational content.
18% to submit a job application.

With growing ranks of smartphone dependents, and the increased notion that smartphones are required for participation in the economy, do consumers need better protections from service interruption, as users of utilities like electricity and land-line telephone service do?

“As an organization we aren’t in the business of promoting particular policy outcomes so we don’t have a formal position on whether additional regulation is necessary to help that group …or what those regulations might look like,” Smith said. “But we do hope that these findings can help inform the broader debate that’s happening over broadband expansion and other digital divide issues, by giving a more thorough view into the day-to-day lives of that ‘smartphone dependent’ group.”

Financial Woes Plague the Smartphone Dependent

Part of Everyday Life

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