Lower prices and better selection of smartphones at tier-two carriers like Boost Mobile, MetroPCS and Virgin Mobile are causing a decline in pre-paid smartphone sales from tier-one carriers in the USA.
According to the NPD Group, 70% of smartphone buyers who purchased their phones on a prepaid carrier had switched from a tier-one carrier in Q3 2012. The research company says that the overall penetration of prepaid smartphones rose from 39% in Q2 to 42% in Q3. Prepaid smartphone sales at prepaid carriers were up 23% over the prior quarter, while at tier-one carriers prepaid smartphone sales fell 12%. Consumers who were replacing their mobile phones were more likely to have switched from a tier-one carrier (80%) than were first-time smartphone buyers (60%).
Overall smartphone penetration rose from 66% last quarter to 70% in Q3. Android experienced a unit volume increase of 25%, as its share increased from 59% to 63% of the smartphone market. Apple’s iOS unit volume rose 16%, and the company’s market share remained steady at 31%.