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Are high-end handsets good for prepaid?

We talked recently about how Sprint is focussing on the top and bottom of the market with their 4G WiMax service and dual-headed prepaid division, featuring Boost Mobile and Virgin Mobile. But they’re keeping these entities separate. WiMax customers will deal with Clearwire, a Sprint partner. They won’t be sold prepaid wireless plans. Prepaid customers will continue to deal with Boost and Virgin. They won’t be targeted, necessarily, for WiMax. Yet one research executive thinks that high-end handsets are a good thing for prepaid.

Allen Hepner, executive director at New Millennium Research, believes that prepaid companies offering high-end handsets are only helping themselves. (via Cellular-News).

“The bottom line here is that prepaid no longer means low tech when it comes to phones. One of the biggest raps on prepaid phone service was that the phones were behind the state-of-the-art handsets. Many consumers who were outside of the traditional prepaid consumer profile no doubt were put off by the notion of ‘going backwards’ in cell phone technology in order to use a prepaid service. The good news for those consumers is that the prepaid industry is catching up and can now cater to their needs.”

The problem is, the biggest prepaid carriers typically do not carry high-end handsets. They might carry a perception of being high-end, because of features like QWERTY keyboards and touch screens, but compared to the rest of the market the listed phones just aren’t “state-of-the-art.” Hepner highlights the Samsung Finesse and Instinct, but they’re hardly high-end. Compared to other prepaid handsets maybe, but they’re still far behind the newest wireless devices.

Perhaps this is a language thing. Hepner says high-end, state of the art handsets. I say they’re regular old, mid-range handsets with a few bells and whistles. If they’re helping the prepaid market, that’s a good thing. But they’re far from the top of the cell phone market.

3 Responses

  1. Horatio Says

    I think that when it comes to cell phones the conversation becomes skewed in people’s heads. iPhone created a benchmark that all other smart phones are being judged by. The problem here is semantics. The iPhone is basically a portable laptop. It’s phone application is almost inconsequential compared to everything else it can do.

    Most consumers really are looking for a phone when they purchase one of these hand-held devices. And most are also looking for value. The Samsung Finesse, the new StraighTalk pre-paid offering, will not only level the playing field between those who have and those who have not, being that for only $45 a month it will offer unlimited talk, text and data, but, mind my words, it is a harbinger of times to come.

    People can’t afford the gouging going on at the top phone companies anymore. They need to control their spending and the no contract StraighTalk helps them plan a budget without added end-of-month surprises. Walmart, which puts out the StraighTalk, is not the world’s largest discount retailer for nothing. The big phone company’s New Year’s Resolution for 2010 ought to be to bring down prices or lose market share to the pre-paid phone companies and the most proven gargantuan retailer in the world.

    Posted on December 14th, 2009 at 9:35 am
  2. Lea Grey Says

    Does it really signify; ‘state of the art’ is old technology by tomorrow. Most people just want a nice phone that has all the functions that they need at a good price. I prefer a qwerty phone to a touchscreen because I send a lot of texts every day so an iPhone would not only be wasted on me but they are particularly bad for texting. monthly prices are very important too which is why Straight Talk’s $30 per month for 1000 minutes, 1000 texts and 30mb of data is my choice.

    Posted on December 15th, 2009 at 6:22 am
  3. Justin Starr Says

    I had been with Tracfone for years, and yes, all I wanted was a basic phone. No bells or whistles, and since most cell phone cameras are horrible, why even bother? I was content with my 50 buck a month bill (with no add on charges, yes!!) but recently decided to try the WalMart StraightTalk (joint venture with Tracfone)system. So far, the Verizon carrier gives me fewer signal bars than the side by side Tracfone, but the actual communication does not seem to suffer (not tried to compare web browsing). That being said, the phone users manuals for both companies suck for anything beyond the simplest instructions. The middle of the line LG 290CM StraightTalk phone (proprietary at $80 plus tax plus a month card starting at 30$) is a decent enough phone but I find it slippery to hold in big hands, and despite the large screen only has tiny font (apparently can not be made larger) when reading or composing texts. Approaching middle age, that makes it tough to read. Still, the price is right ($30 for 1000 minutes), it does the job (just phone plus a few texts a day) but I wouldn’t rave about it like my old Samsung slider, but since I can’t return it, I’ll just wait till they expand their selection of phones to something that doesn’t annoy me each time I use it. Customer service at Straighttalk is almost a joke. After repeated calls, the consistent answer is not (paraphrasing) “Hang on and we will get to you in an hour” but “We can’t take your call, call some other time and try again.”

    Posted on June 8th, 2010 at 12:34 pm

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