Smartphone sales rise in the US, the thriving segment is prepaid though – Part 2

On paper post-paid customers get more incentives for opting and using a wireless connection. They sign a two-year contract, normally, and get subsidized smartphones. All they have to do is pay the bill at the end of the month.

Prepaid consumers on the other hand have the free will but at a cost. They can choose any smartphone and any package to their liking but all that comes at the cost of full prices without any subvention. However, they have the freedom to use a package or not use it and they can also change the network at will as well. All they have to do is pay for the package in advance.

Apple and Samsung struck gold as always in smartphone sales in the second quarter, according to the report. Their combined smartphone unit sales rose 43% from Q2 2011, while unit sales for other brands fell 16%.

Apple was No. 1 in the U.S. with 31% market share, followed by Samsung with 24% and HTC with 15%.

Prepaid wireless services appeal mostly to lower-income customers. That explains why the income level of the average smartphone buyer in the U.S. is falling, Baker says. In Q2, 33% of smartphone buyers had average household incomes of less than $35,000 a year, vs. 24% in Q2 2011. And 71% of prepaid smartphone buyers had an average income less than $35,000, up from 59% last year.

“While there’s still some opportunity in postpaid, most of the real big opportunity going forward is going to be in prepaid,” Baker said. “If you look at the demographics in what’s driving the prepaid market, it’s lower-income and entry-level consumers who haven’t been in the smartphone market before. As the market matures, you need to find those niche opportunities that let you continue to grow.”

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Posted by Usman Khalid on Aug 9 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.