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Summary:

A third of all smartphones activated in Q1 were on prepaid plans, a trend that historically has favored Android, according to The NPD Group. Apple, though, is starting to make in-roads into the prepaid market.

The Samsung Galaxy S II: Good, but only as good as Android allows it to be.

Wondering where the big surge in Android activations Google announced at I/O is coming from? In the U.S. at least, Google should be thanking the prepaid operators. According to The NPD Group, one out of every three smartphone activations (32 percent) in the U.S. last quarter was on a prepaid no-contract plan.

Since Android has long been the prepaid carrier’s OS of choice, the vast majority of those devices ran Google’s software. NPD’s Mobile Phone Track service show that year-over-year prepaid smartphone unit sales doubled in the first quarter. Quarter over quarter, prepaid’s overall share of the smartphone market jumped from 22 percent to 32 percent. NPD’s VP of industry analysis Stephen Baker said Q1 marked the twelfth straight quarter of triple digit sales increases in the U.S.

Q1 2013 Chart - NPD Prepaid

Apple certainly isn’t blind to the trend. In fact, it’s been actively seeking out prepaid carrier partnerships in the last year working with carriers like Cricket Communications, Straight Talk and T-Mobile USA. Though the iPhone’s share of the prepaid smartphone market was only 8 percent, that’s up considerably from last year when it was a mere 2 percent. Samsung share of the prepaid smartphone market is big, 32 percent, but it’s relatively stable, while Apple is on a big growth trajectory.

“For consumers looking at prepaid phones today, value does not equate with finding phones that are cheap or obsolete,” Baker said in a statement. “In fact, the Galaxy S2 and the iPhone 4S, two of the top five prepaid smartphone models in 2013, were among the top-selling phones overall just one year earlier.”

  1. 1/3 of smartphones were smartphones? That’s weird!
    Feel free to delete this comment once the text is corrected.

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    1. Kevin Fitchard Wednesday, May 15, 2013

      Thanks for catching that, Victor. Obviously a brain fart on my part. It’s corrected, but your comment remains for the world to see! :)

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  2. “jumped form 22 percent to 32 percent.”

    jumped _form_?

    GET AN EDITOR.

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    1. Kevin Fitchard Wednesday, May 15, 2013

      Corrected

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  3. Kevin is there any data on how many of those prepaid smartphones were activated under a state or federal “Lifeline” program (i.e., the so-called “Obama phones”)?

    Lifeline phones are basically given away for free by many carriers because their cost is subsidized by USF fees paid by all non-Lifeline telephone customers (both wired & wireless).

    If the subsidy is enough that it can pay the full cost of a smartphone, something is terribly wrong.

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