Prepaid gives Google a huge Android boost (and Apple has noticed)

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.”

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