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US smartphone sales increase 9 percent thanks to huge prepaid growth

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New data from NPD shows that while sales of smartphones on traditional postpaid plans were flat year-over-year, sales of prepaid phones increased 91 percent. Taken cumulatively, the huge growth in prepaid pushed total smartphone sales growth to 9 percent year over year.

htc evo v official 640
htc evo v official 640

It’s impressive that despite an adverse economy, smartphone sales in the US are growing at a rate of 9 percent year over year, but even more interesting is where that growth is coming from. NPD reports that while sales of traditional postpaid devices were flat in Q2 of 2012, prepaid sales nearly doubled — up 91 percent over the same period last year. A quick back-of-the-envelope calculation shows that by NPD’s numbers, prepaid phones grew from 10 percent of all smartphone sales a year ago, to over 17 percent in the last quarter.

So what’s driving the change? As pointed out by GigaOm, one factor is the improved quality of Android devices available through prepaid providers — like HTC’s Evo V, which can be purchased through Virgin Mobile for $299. With the US postpaid market inching toward a growth ceiling, the question remains how long cheaper prepaid plans can keep new customers coming in.