Tech Policy

Smartphone

For Communities of Color, Increased Smartphone Costs Mean Decreased Opportunity

Despite becoming synonymous with everyday life, smartphones are one commodity that’s still capable of generating global headlines. One such example happened recently, when the European Commission fined Google $5 billion for requiring Android manufacturers to preload apps like Google Search and Chrome onto smartphones that come with others like the Google Play Store. While I want to disclose up front that Google financially supports the Joint Center to advance the Joint Center’s mission, I’m concerned about the decision because a similar decision in the U.S. could make smartphones less accessible to communities of color.

Put simply, Android is one of the few affordable phone options for cost-conscious consumers. Whereas many Apple models cost around $400, individuals can easily find Android smartphones for just $100 . This has been extremely helpful for people with fewer resources , including many in communities of color. Our data show that 66 percent of African Americans and 62 percent of Latinos use Android smartphones.

But rulings like the Commission’s could have ripple effects that push prices up. Android phones are so affordable, in part, because Google makes money from ads rather than the devices themselves. Yet if U.S. policymakers followed Europe and prohibited Google from requiring the installation of apps like Google Search and Chrome, it could easily increase the cost of Androids. The result? Black and Latino communities would suffer.

Within the United States, African Americans and Latinos are disproportionately “smartphone-only” users. According to Pew, while only 14% of Whites own a smartphone but do not use broadband at home, that number is 35% for Latinos and 24% for African Americans. This is because racial gaps are significant among desktop and laptop use, but are virtually non-existent with smartphone use. For example, 83% of Whites — but only 66% of Blacks and Latinos — have a desktop or laptop. By comparison, 77% of Whites, 75% of Blacks, and 77% of Latinos own smartphones. Blacks and Latinos are also more likely to rely on smartphones to obtain information about a job, access educational content, and submit an application.

My organization — t he Joint Center for Political and Economic Studies — is particularly concerned about this issue. We’re currently finishing a study that shows how much mobile apps could help Black and Latino businesses grow. This is a major challenge, since while Black-owned businesses make up 9.5% of all businesses in the U.S., they  account for only 1.3% of sales and 1.7% of employment. Similarly, Latino-owned businesses make up 12% of all businesses, but account for only 4% of sales and 4% of employment.

In light of these disparities, our research shows how important low-cost, off-the-shelf apps are for Black and Latino businesses to get ahead. The data clearly demonstrate that these apps help entrepreneurs become more efficient while providing more services to customers. For example, salon mobile apps for beauty shop and barbershop owners like Booker , Phorest , and BuildFire give a client the freedom to book and pay for an appointment 24-hours-a day, from any location. Similar apps exist that are tailored to other industries that, along with beauty salons and barber shops, collectively make up 54% of all Black businesses — child day care services , janitorial services , home health care services , landscaping services , and artist and performer businesses .

Our research further shows that off-the-shelf apps could lower barriers for Black and Latino entrepreneurs to move into more lucrative industries, like rental property , plumbing , heating/air conditioning , and electrical and other wiring installation . For example, for a little over $1.00 per residential unit per month, Appfolio can provide a rental property entrepreneur an app that can automatically post vacancies to multiple websites, allow potential renters to apply from a mobile device, screen applicants, allow renters to sign leases and make pay rent from a mobile device, automate late fees, and manage accounting and maintenance issues. These are big steps forward for many entrepreneurs, but they are contingent on their customers and workers having access to smartphones.

Increasing the cost of smartphones can seriously hurt economic development in Black and Latino communities. From looking for jobs to filling out applications to buying products, it’s clear certain technologies are imperative to survive in the 21st century. This isn’t to say low-cost smartphones and apps are total solutions — but they’re surely a start.

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Spencer Overton is the President of the Joint Center for Political and Economic Studies, a think tank founded in 1970 that focuses on how public policy affects Black communities. Google contributes to the Joint Center to support its mission, but Spencer’s views are his own.

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