Smartphones on Prepaid Carriers

Since their introduction, smartphones have occupied the high end of the market. Not everyone can afford to commit to a monthly data charge on top of a regular cell phone bill for two years, and some might not have the credit score to qualify for a billed plan.

The prepaid market is opening up to smartphones, though. Last week, Cricket Communications announced that the iPhone would be available on its network with no contract starting June 22. An 8GB iPhone 4 will cost $399.99 while a 16GB iPhone 4S will cost $499.99. A monthly charge of $55 covers unlimited talk, text, and data. A report from TechnoBuffalo claims that Boost Mobile will offer the phone come September as well.Prepaid Smartphones Image

The move comes just as Google has started offering the Samsung Galaxy Nexus in the "Devices" section of its app and content store, Google Play. Sold unlocked and with no contract for $399.00, the Galaxy Nexus works on prepaid and billed carriers using GSM networks like T-Mobile and AT&T.

To be sure, the iPhone and Galaxy Nexus aren’t the first smartphones to be made available to prepaid customers. Google sold the Nexus One for $529 unlocked back in 2010. As of June 2012, Cricket already offers two Android phones; Boost has six Android phones and one BlackBerry handset on its monthly unlimited plans; Straight Talk and Net10, both part of TracFone, have five Android phones; and Sprint’s Virgin Mobile offers seven Android phones.

Other prepaid carriers either sell or support smartphones, but none have the selection or pricing power that major contract carriers offer. Even the prepaid division of Verizon Wireless offers only one Android phone compared to the nearly 50 a customer can choose from on a contract. AT&T, the original exclusive iPhone carrier in 2007, has only seven smartphones, all Android handsets, available for its prepaid plans, but 40 smartphones on contracts.

By operating system, however, the addition of the iPhone amounts to a significant change to the prepaid landscape. While it’s not impossible to wrangle an unlocked iPhone onto a prepaid network, the Cricket offering is the only one with Apple’s blessing. The iPhone accounts for nearly a quarter of the world’s smartphones according to industry analyst IDC, and its inclusion in the prepaid market can only increase that share.

Update on June 7, 2012: Virgin Mobile has announced that it too will offer the iPhone, starting June 29. While Virgin will offer plans as low as $30 with unlimited texts and data, the initial purchase price will be higher than Cricket's. Virgin Mobile will sell the 16GB iPhone 4S for $649 and the 8GB iPhone 4 for $549.


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