Insights

Should My Gen Z’s Phone be the G.O.A.T?

As a parent who has worked in tech research for a couple decades, I’m now confronted with my own teenagers’ demands for—and usage of—the latest and greatest technology. I’ve often wondered how family dynamics play into acquisition of tech products. During my career, I’ve found it’s usually an afterthought in the research, if considered at all. Instead, I find most clients are simply trying to understand purchase cycle and desired product features that will garner maximum revenue. And while I’m all for maximum revenue, the psychologist (and parent) in me has always wondered:

How does a parent decide if, and when, their child should have a mobile phone? What about a smartphone?

I remember being a little surprised when my teenage neighbor would pre-order the newest iPhone while I, a working adult well into my career, was still using my old, three-generations-ago iPhone. And now that I have two teenagers, I wondered how typical my experience is for acquiring phones in my family. Shouldn’t kids get a basic mobile phone around middle school and use hand-me-down phones from other family members? Don’t the adults in the family have the newest models? Or is my view outdated? And if I get my teens a new smartphone, have I turned into those parents who buy the newest models for their teens? Should my Gen Z’s phone be the GOAT (i.e. for those Millennials and older, this is slang for Greatest of All Time)?

A lively topic that often pops up in conversations with my parent-friends, this is something tech clients should be paying attention to. Gen Z (those born from 1998 onward) is estimated to account for $29 to $143 billion in spending by 20201. According to Engine’s Cassandra Report, they also influence parental spend, with 93% of parents saying their children influence purchases2.  In the mobile phone industry, the upgrade cycle has slowed tremendously in recent months, even for the dominant manufacturer, Apple, with the 3-year upgrade cycle in 2018 expected to hit 4 years very soon3.  So, what’s this mean? Simply put, mobile phone manufacturers and wireless carriers need to understand how families make phone upgrade choices.

Using our CARAVAN omnibus research, we asked some questions of parents with children aged 22 or younger so they could best provide answers on when and why they purchased phones for their kids. We also asked a few questions to non-parents for their perceptions and comparisons.

Do parents and non-parents have differing views on the appropriate age for kids owning mobile phones and smartphones? Definitely. Our results showed that significantly more parents with children in their household than non-parents believe an appropriate age for a first smartphone is 12 or younger. In contrast, significantly more non-parents think smartphone ownership should occur later (13-18).

gen z cell phone data

There is usually a steep cost for smartphones when compared to basic phones, and not surprisingly the parents with incomes of $100k+ are significantly more likely than those with lower incomes to believe smartphone ownership should occur at age 8 or younger.

Now let’s take a deeper look into how parents differ in their views of overall phone acquisition for their children.  Gen Xers (born 1965-78) like me are significantly more likely to have given their child a phone of some kind at age 12 or younger. Additionally, many believe the first child wouldn’t have the fanciest phone with the greatest features, but instead have a hand-me-down from another family member or a used/refurbished phone. In fact, there were some generational differences between Millennials (born 1979-97) and Gen Xers when looking at the first phone purchase for their child: Millennial parents were most likely to report a refurbished or hand-me-down phone (33% vs 23% for Gen Xers), while Gen Xers were most likely to report buying a new phone for their child (77%) than were Millennials (67%). Income differences don’t account for this.

Parents, as one would expect, play a large role in the acquisition of the child’s first phone. Interestingly enough, however, they aren’t necessarily buying it for them. Nearly 20% of children are providing some monetary contribution for their first phone.

I appreciate the fact that nearly 1 in 5 kids have contributed to the expense for a product that some call utilitarian and others call a luxury. I often remind my teens that I have worked hard for many, many years to afford any nice, new tech. Why should they just have it handed to them? My teens can give me lots of reasons as to why they should have a new model, mostly related to just wanting the newest features or because they have put up with a phone for more than two whole years that has a severely cracked screen with no remaining storage. So… who has the newest model phone in the family?

The nearly 20% of children with top-model in the family phone hierarchy is interestingly not driven by HH income. So, why would a child have the newest phone in the family? As evidenced in my own family phone purchase, most of these factors were in play:

As it turns out, family members gifting their own upgrades and/or providing a special holiday or birthday gift along with scheduled wireless provider upgrades are all key reasons children receive the newest phone. I will call out some friends and relatives who are in the group, “I want my child to have the latest and greatest” and roll my eyes at that justification, but I should acknowledge that begging apparently does pay off for some teens (long after we may have assumed that strategy was only successful in the toddler days).

Although the phone purchase cycle continues to slow, kids are acquiring more expensive phones at younger ages. With that said: Tech clients, don’t discount the child’s influence on family tech purchases. It’s a big part of the Gen Z multi-billion-dollar pie.

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1 – The Power of Gen Z Influence, Millennial Marketing, 2018.
2 – 2015 Cassandra Report: Gen Z
3 – https://9to5mac.com/2019/02/08/four-year-smartphone-upgrades/
The results of this study are from Engine’s CARAVAN omnibus. The questions were in field May 6-12 (2 waves of n=1,000) to provide a nationally representative sample. Two waves were also needed for a robust sample of parents for subgroup analysis.

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