Smartphones are Driving Mobile Prepaid Growth

In the first quarter of 2013, total smart phone sales increased 42 percent year-over-year, with prepaid devices representing 36 percent of the unit volume increase, according to The NPD Group.

Postpaid smart phone unit sales grew 23 percent, year over year.

Samsung’s share of prepaid smart phones remained stable between the fourth quarter of 2012 and the first quarter of 2013, the company has noted some market erosion compared to the prior year.

Both LG and Apple made significant inroads into the prepaid segment, with LG’s unit share doubling and Apple’s unit share increasing fourfold. At least in part, that is because makes and models available to prepaid buyers are closer in functionality of the latest top-end devices.

Sales of the top five prepaid smart phone brands comprised more than 80 percent of all prepaid smart phone sales, an increase of five percentage points over the first quarter of 2012. National retailers were the dominant retail channel for prepaid smart phone purchases, and their sales-volume share has risen almost 40 percent in the past year, according to NPD. 

Those sales suggest the prepaid segment of the mobile business will continue to grow, as the “value” segment of the market grows, perhaps adding about $1 billion in incremental new revenue per year.