Consumers Dropping DSL, Cable for the iPhone?

Posted by: Olga Kharif on October 30, 2008

Less affluent consumers are jumping onto the iPhone bandwagon. According to a new comScore report, since June, iPhone adoption has risen 48% among those earning between $25,000 and $50,000 per year and by 46% among those earning between $25,000 and $75,000. These growth rates are three times those of people earning more than $100,000 per year.

comScore’s conclusion? More consumers are turning to the iPhone instead of gadgets like home computers to access mobile Web and e-mail. In effect, consumers are foregoing cable modems and Digital Subscriber Lines. That makes a lot of sense: I pay some $40 a month for DSL, plus $30 for a home phone line (required for ordering DSL), plus more than $50 for standard cell-phone service. That adds up to $120 a month, plus various fees and charges. If I can surf the Web, make calls and answer e-mail for $70 to $95 a month, that will translate into savings of at least $300 a year — and more than covers the price of a new iPhone.

As more consumers look to cut costs, and as more iPhone-like devices come onto the market, traditional telcos and cable companies will have to cut their prices to compete with such alternative wireless offerings — or to watch more subscribers walk out.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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