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Silver Can Turn Into Gold

Silver Can Turn Into Gold

Nokia and Hollywood film makers have identified that substantial profits are waiting to be grabbed by appealing to the silver-haired generation of cell phone users and cinema goers. Recent developments in both those markets substantiate this.

Nokia says its low-cost smart phone Asha is outselling the company's high-end Lumia model by a ratio of 3 to 1 and in "Tinsel Town" the makers of the "The Best Exotic Marigold Hotel" film made $134m against a low production budget of $10m; nice work if you can get it.

So why has the Asha been so appealing? The answer is simple; it's cheap but does the job that a lot of people are satisfied with, especially those on modest budgets. According to analysts IHS in three years the low-end smart phone market will be 30% of the overall mobile phone market. They have older cheaper components in them and in terms of screen and camera technology the budget phone does a reasonable but not great job when compared with the latest high-end phones. Price wise the low or high-end cell argument is a given for those users on a strict budget. A low-end phone costs around $45 in the United Kingdom compared to some of Apples latest iPhones which will set you back up to $700. Apple are rumoured to be considering a move into the low-end smart phone market and Chinese phone manufacturer ZTE has said it will launch a lower-end smart phone running a Firefox operating software in Europe this year.

Some may say that this trend will suffocate the continued development of ever-smarter phones.

I disagree. If the phone makers are making good profit selling older technology where all the R&D costs have been absorbed through previous economies-of-scale then a proportion of that money will naturally go towards new product R&D.

Back in Hollywood the movie moguls are set to further cash in on the silver-haired, silver-screen enthusiasts with films like Dustin Hoffman's Quartet and Song for Marion. These follow hits like The King's Speech, Mama Mia and Tinker, Tailor, Solder, Spy. A common thread running through all of these is the successful synergy of a strong script and storyline and a talented and experienced cast. Mature audiences like this are less enamoured with computer-generated special effects.

So have Nokia and Hollywood hit on a rich seam of old gold? Population stats speak for themselves. In 2010 there were 87 million people aged 65 and over in Europe, more than 17 % of the total population and according to the Georgia State's Center for Mature Consumer Studies, the 55-plus age group controls more than three-fourths of the country's wealth and the baby boomer generation of approximately 78 million is turning 50 at the rate of 300,000 a month.

So it wont only be production related economy of scale driving down the prices consumers pay for technology it’s the silver-spenders that will also top up the pots of gold 

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