Why prepaid could help Bada win in the U.S.


Samsung’s Bada has yet to come to American shores, but the platform continues to grow its audience overseas. The manufacturer’s shipments of Bada handsets – which came to market just last summer – have grown 355 percent since launch, according to data released last week by Canalys, and the platform outsold Windows Phone 7 during the first quarter of 2011. Bada is already building a sizable audience in Western European markets such as Germany and France. And while Samsung has yet to disclose any plans to bring Bada to the U.S., I think that if it were to come here, the prepaid market would be the path to its success.

Bada’s consumer appeal is largely due to the fact the handsets that run it occupy a middle ground between feature phones and high-end smartphones. As my former colleague Mike Dano noted a few months ago, the average price of a Bada handset in Western Europe is about $66, while Android phones ($100) and iPhones ($230) are substantially pricier. For instance, the Samsung Wave II S8530 can be had for about $300 without a contract, despite sporting impressive specs like a big, sharp screen and an excellent video camera. And there are other things to like about Bada: Samsung delivered its 100 millionth Bada app download earlier this year, and the company’s app portfolio passed the 13,000 mark several months ago. While that library pales in comparison to Apple’s App Store, it’s ample for casual users who download just a couple of titles a month.

The prepaid market in the U.S. continues to soar as budget-conscious consumers look for cheaper alternatives to pricey, long-term contract services. Prepaid users will account for one-fourth of the worldwide market of mobile users by the end of 2011, the New Millennium Research Council said this week. And it’s no surprise that those prepaid users are increasingly interested in smartphones. MetroPCS, for example, said this week that increasing demand for Android-based handsets in the U.S. has fueled a substantial increase in average revenue per user (ARPU) during the second quarter.

But prepaid smartphones aren’t exactly the sexiest handsets on the market. The most advanced MetroPCS smartphone – the Galaxy Indulge – carries a $300 price tag and runs Android 2.2, which is a year old. And while the new Motorola Triumph for Virgin Mobile is garnering solid reviews, the handset faces the same challenges: a $300 price and Android 2.2. Meanwhile, Samsung is preparing to roll out Bada 2.0 in September with the launch of the Wave 725, a souped-up handset that will reportedly support NFC and feature both front- and rear-facing cameras. The upgraded platform should close the gap between Bada and the leading operating systems (iOS and Android), and it could outperform older versions of Android. So if Samsung could produce a similar phone at a price that competes with other top-tier prepaid smartphones in the U.S., it could have a hit.

This isn’t to say that the current Bada handsets are comparable to the Galaxy Indulge or the Motorola Triumph: Bada isn’t available in the U.S., so I haven’t had a chance to use the operating system. But Samsung has proven that a viable market exists for a new platform that addresses users who need more than just basic feature-phone functionality but want a cheaper alternative to high-end smartphones and services. That’s a market that’s growing in the U.S., too, as MetroPCS’s recent earnings confirm.

All the pieces are in place for Samsung to duplicate its success with Bada in the U.S.: It already has the distribution channels and carrier relationships, and consumers have few choices when it comes to high-quality mobile data phones and services at competitive prices. I think it’s very likely we will see Bada handsets in the U.S. within a year. And prepaid would be the perfect path to market.

Question of the week

Would Samsung have as much success with Bada in the U.S. as it has had in the European markets?

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