Google and Apple look to tap prepaid smartphone plan growth

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Android-based smartphones are the preferred choice for prepaid plans

In the previous part of this series, we discussed how the prepaid mobile service market is growing fast. All major U.S. telecom providers—Sprint (S), AT&T (T), T-Mobile (TMUS), and Verizon (VZ)—are looking to increase their prepaid offerings.

To leverage this growth, smartphone players are also looking to partner with carriers with prepaid plans. According to a report from NPD Group, Samsung (SSNLF) led the unit share of prepaid smartphone sales as of 1Q13.

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As the chart below shows, Google’s (GOOG)(GOOGL) Android-based smartphones such as Samsung, LG, Huawei, and HTC are users’ first choice when it comes to opting for prepaid smartphones. But the report also mentioned that although Apple’s (AAPL) share of 8% looks small, Apple managed to increase its share from 2% a year ago.

Telecom prepaid smartphone share

Apple’s looking to leverage the fast-growing prepaid market

Even though Apple has managed to increase its share by four times to 8% as of 1Q13, its share is still small compared to its overall share in the U.S. smartphone market. According to a report from Counterpoint, Samsung had a share of 36% in the U.S. smartphone market as of 2Q14, with Apple’s share a close second at 30%. This finding shows that Apple needs to catch up a lot in the growing prepaid market.

But according to a recent report from 9to5Mac, Apple is preparing to enhance its Apple Store operations around prepaid plans in the U.S. This is important for Apple. The prepaid market is growing at a much faster pace than the postpaid market, as we discussed in the previous part of this series.

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