Article originally published on Orlando Business Journal
Hispanics are embracing technology faster than the general market. Based on research by Experian Marketing Services featured in the 2014 Hispanic Market Overview, Hispanics are an ideal audience to reach via mobile engagement.
Do it right and their economic impact on your business could be substantial, as Hispanics not only represent more than 15 percent of the U.S. population but also 22 percent of millennials overall.
An estimated nine out 10 Hispanics have Internet access but are less likely to have it at home (62 percent vs. 76 percent). According to Experian, 63 percent of Hispanic adults own a smartphone vs. 60 percent of non-Hispanics. Hispanics are 3 times more likely to access the Internet via their mobile device (9 percent vs. 3 percent non-Hispanics). And 45 percent of Hispanic smartphone owners are mobile-dominant when it comes to going online compared with 38 percent of non-Hispanics.
So, could the new iPhone 6 convert more Hispanics into iPhone owners? It will depend on how fast Apple wants to capture the second-largest consumer market in the U.S. Price and brand penetration are two important factors where competitors of the Apple iPhone are taking the lead. According to Experian, 53 percent of Hispanic smartphone owners have an Android and 34 percent have an iPhone.
In South America, people tend to use PC products at home and in their offices because they are affordable and reliable. Macs are seen as a more sophisticated computer with a less user-friendly software and higher price. Unless your career or business is in the art or design industry, you can’t justify owning a Mac.
This loyalty to PC products in South America has been transferred to Android and Window phones, too. In Latin America, 86 percent of Argentineans, 90 percent of Brazilians and 80 percent of Mexicans use Android cellphones. Also, according to Kantar data, more people in Mexico use Microsoft’s Windows phone than the iPhone.
As of today, there is only one Apple store in South America. It is in Rio de Janeiro, Brazil. Thanks to the country’s high import taxes, the starting price for an iPhone 5S is just under $1,200 in Brazil, compared to $549 unlocked and contract-free in the U.S. To capture this audience in Latin America and the Hispanics in the U.S., Apple has some homework to do — beginning with understanding the Latino culture and their needs — if they want a stronger presence in South America.
Price, practicality, reliability and compatibility are four key factors for Hispanics. Android has been the go-to phone for people who are using smartphones for the first time. This is evidence of its popularity in emerging Latin American mobile markets.
Dr. Frank Luntz in his book Words That Work says that thanks to increasing dependence on technology, more people think reliability of a particular product or service is at least as important as price. In fact, it has become a core component of the new value equation for businesses seeking to redefine the “cost” of their products or services: Value = price + convenience + reliability.
We can’t argue that Apple’s iPhone is reliable, but it has some work to do on price and convenience for Hispanics to see real value. However, it has done a great a job at attracting the early adopters of the smartphone. Only time will tell if the iPhone 6 will convert more Hispanics in the U.S. to Apple. In the meantime, more South American fans will continue buying the phones here and will bring them back to their countries. The question is, how long are people willing to pay the price?