Prepaid Phones Get Smart With Android

Boost Mobile today said it would offer the Motorola i1, the first Android (s goog) phone for the prepaid market in the U.S., a move that makes prepaid plans more compelling from a device perspective. The prepaid phone market in the U.S. had a huge growth spurt during the recession thanks to better devices, better coverage because of roaming agreements and a price war that made the value hard to ignore.

Boost, which is a subsidiary of Sprint (s S), is following the trend of prepaid operators offering smartphones and higher-end devices to consumers at an unsubsidized price. As values go, prepaid isn’t a bad deal for certain people, and the addition of smartphones to the line-up is a nice touch, although getting nationwide data coverage on some prepaid networks isn’t as smooth as nationwide voice coverage.

As for the devices, they’re generally behind the overall market. For example, this Motorola (s MOT) Android phone runs Android 1.5, which is several updates behind the cutting-edge Android phones running 2.1 or the 2.2 Froyo update that came out last month. Leap Wireless (s leap), which runs the Cricket prepaid service said earlier this year it would offer an Android phone. For users this means that not all of the apps in the app store will work, and that the interface isn’t as good. However, when compared with a BlackBerry (s rimm) or a non-smartphone, it may be enough to keep someone who wants a smartphone without giving up the ability to pay $50 a month for voice and data.

Related GigaOM Pro Research (sub req’d): What Happens When Data Friendly Phones Come to Prepaid?