In the ever-evolving world of technology, smartphones have emerged as game-changers, revolutionizing our lives in ways we couldn’t have fathomed just a decade ago. From controlling smart homes to handling financial matters, these pocket-sized devices have become the go-to devices for multitasking. A recent study, ‘Economic Value of a Smartphone’, conducted by Vivo India in association with Techarc, unveils the surprising facts about the financial benefits that smartphone ownership brings to consumers and India as a whole.
The study sheds light on the increasing reliance of smartphone users in India on their devices for paying utility bills and making various shopping, booking, and hiring transactions. What’s truly remarkable is that for every ₹1 spent on owning a smartphone, the financial benefit to the consumer is a staggering 6.1 times.
In other words, smartphone owners in India experience a mind-boggling 6.1 times return on every ₹1 invested in their beloved devices. In a more simplified way, if an Indian buys a smartphone priced tagged Rs 10,000, he enjoys benefits worth Rs 61,000. Hence, in a world where smartphones have become an integral part of our lives, the digital revolution facilitated by smartphones is undeniably worth every penny spent.
What’s the Economic Value of A Smartphone?
The economic value of a smartphone can be calculated by dividing the “Total Benefits” derived from owning one by the “Total Costs” incurred. The total benefits include savings from online discounts and offers, savings from reduced trips to physical markets, and the opportunity cost of time saved by minimizing market visits. On the other hand, the total costs encompass the initial capital expenditure (the cost of the smartphone itself) and ongoing operational expenses (the cost of telecom services).
Considering these factors, one can gauge the true economic value smartphones bring to individuals and society.
Economy Value of Smartphones by Segments
The Vivo India study brings attention to a significant disparity in the average economic value of smartphones across various segments of society. These segments include socio-economic groups, age groups, cities, and digital activities.
Average Economic Value by Socio-Economic Groups:
The average economic value of smartphones differs significantly between the rich and middle-class segments in India. Interestingly, the affluent class enjoys an economic value that is nearly 50% higher than that of the middle class (with an annual household income of 5-30 lakhs).
With a remarkable 22.5 times return on their smartphone investment, the rich enjoy substantial financial benefits. Meanwhile, the middle class still reaps an impressive 10.1 times return, despite being less than half of the affluent segment’s value. This difference may seem significant, but the economic value for the middle class holds immense importance due to its sheer size and rapid growth.
Considering the diverse needs and preferences of consumers across different cities, the sole purpose of this survey was to take a closer look at the benefits of a smartphone. We are delighted that we are one of the key enablers behind this altered way of life, driving value for the users and impacting the environment positively, Geetaj Channana, Head, Corporate Strategy, Vivo India said.
Average Economic Value by Age Group and City:
Analyzing the economic value across different age groups and cities, the study unveils intriguing insights.
Adults aged 41-60 derive the maximum benefits, averaging smartphone economic value of 7.7. This is marginally higher than young adults aged 25-40 who are able to clock 7.6. Meanwhile, individuals between 18-24 years old record an economic value of 5.5. These differences suggest that different age groups utilize smartphones in different ways, impacting their economic value differently. It could be attributed to variations in financial responsibilities, digital behaviours, and specific needs and preferences within each age group.
In terms of cities, metro areas lead the way with an average smartphone economic value of 7.6, followed by non-metro cities at 6.2. It depicts that smartphones are generating economic value across both urban and rural areas, contributing to the overall digital landscape and economic growth of the country. However, there is a slight advantage towards metro cities, suggesting a higher concentration of digital activities and economic opportunities in these urban centres.
Average Economic Value by Digital Activities:
The study goes even deeper into the economic value generated by various digital activities Indians performed on smartphones. It reveals that service booking and hiring activities yield the highest returns on investment, with an impressive return of 8 times. Close behind are grocery purchases at 7.9 times, followed by utility bills and shopping at 7.6 times, essentials at 7.4 times, and digital cash at 6.9 times.
Notably, the affluent segments make the most significant contributions to digital services, including travel ticket bookings, hiring service professionals, and booking cabs, among others.
About the Study
The study titled ‘Economic Value of a Smartphone’ had a comprehensive aim of gaining insights into the preferences, behaviours, and demographics of smartphone users in India. It encompassed a wide range of individuals, from High-Net-Worth Individuals (HNIs) earning over a crore annually and owning luxury vehicles to regular smartphone users earning ₹1.5 lakh annually and owning two-wheelers.
The study had a diverse sample size of 1,000 smartphone users, representing 14 cities across both metro and non-metro areas. The cities included Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi NCR, Hyderabad, Jaipur, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, Pune, and Surat.
The respondents comprised various occupational backgrounds, including entrepreneurs, professionals, corporate employees, government employees, students, as well as housewives, among others. The age range of the participants spanned from 18 to 60 years. In terms of gender distribution, 62% of the respondents were males, while 38% were females. Additionally, the respondents were categorized based on their location, with 58% representing metro cities and 42% representing non-metro cities.
By considering such a diverse sample and analyzing the preferences, behaviours, and demographics of smartphone users across different categories, the study aimed to provide a comprehensive understanding of the economic value generated by smartphones in India.
As the study unravels the immense economic value generated by smartphones, one can’t help but wonder: Is the smartphone the driving force behind India’s economic progression? The data points towards a resounding “yes,” but with technology advancing at a rapid pace, how will smartphones continue to shape India’s financial landscape in the coming years?
