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The booming market for prepaid smartphones: Are the devices worthy?
Prepaid smartphones are shedding their image as bottom-of-the-barrel options — after all, they can actually save consumers a lot of money
 
A woman shops at a Verizon store: Prepaid phones made up 29 percent of smartphone sales in 2011, up 5 percent from three years ago.
A woman shops at a Verizon store: Prepaid phones made up 29 percent of smartphone sales in 2011, up 5 percent from three years ago.
Spencer Platt/Getty Images

The smartphone industry generally revolves around the latest cutting-edge wizardry rolling off the assembly lines at Apple and Samsung. But a new report shows that the market for prepaid smartphones, which come with fewer functions than their glitzier cousins, is "booming." Prepaid models accounted for 29 percent of smartphone sales in 2011, up from 5 percent a mere three years ago, according to market researcher the Stevenson Company. And bucking conventional wisdom, the report found that income levels and credit scores are no longer "the sharp dividing lines between prepaid and postpaid." Are prepaid smartphones worth another look?

Absolutely. Especially if you don't want to sign a contract: The "typical" smartphone contract costs $70 to $80 a month on the low end, whereas a decent prepaid smartphone will cost you $25 to $30, says J.R. Raphael at Computerworld. That's perfect for those who want core functions like email and messaging, but are reluctant to get locked into a two-year contract. With prepaid, you'll never be hit with "add-on fees and overage charges ('ways they screw you over,' to use the technical term)." You might not be able to get a "top-of-the-line device" with prepaid, but you'll find "plenty of decent midrange smartphones."
"The case for prepaid smartphones: How to cut the contract and save"

But don't forget the drawbacks: "Prepaid customers do need to be realistic about" the limits of the market, says Brandy Betz at The Motley Fool. A prepaid smartphone will likely have Google's Android operating system, which "dominates" the market because its platform is mostly open source. That means no iPhone or Windows Phone for you. Furthermore, "most prepaid Android devices either strip or neuter" Google Play, the new entertainment and app store from Google. If prepaid phones want to gain more of the market, they'll have to keep improving in quality.
"Venture into the world of prepaid smartphones"

Don't do it! A cheap smartphone is a terrible idea: "Listen, I understand the pain that comes with not being able to afford nice things," says Matt Burns at TechCrunch. "But for the love of everything mighty, do not waste your money" on cheap phones. While carriers like Verizon demand a years-long contract, in exchange they offer you quality smartphones at "relatively affordable" prices. Buy a cheap phone, and "you're setting yourself up for a bucket of fail." Your phone will likely have no updates, a small battery, and lousy design, and it's sure to be nothing more than a "lump" in a couple of months.
"Please do not buy cheap Android phones"

 

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