Summary
1. Economic conditions make dramatic impact 2. Operator contracts are burdensome 3. Not just for the low income market....
Analysis
Economies across the globe are in big trouble. People are losing their jobs as well as their company provided cell phone. When unemployed and needing to stay connected to family, friends and prospective employers, many people are finding pre-paid is easy and affordable. With no income, people are having to cut back wherever they possibly can. Rather than pay $50/month, they can use a pre-paid plan and cut-back as needed. This allows them to only pay for what they actually use.
Operator contracts are now requiring a two year commitment. With the uncertainty of the economy, people are a bit more reluctant to commit to longer periods of time. While the market has shown that there is a demand for higher-end devices, people will realize that it commits them for two years and device such as the iPhone of the Instinct require a data plan which means an extra $20 - $30/month.
Mot people think that it is only the credit challenged that purchase pre-paid devices. People are using pre-paid for their 2nd or personal device. Pre-Paid works great for teens who has abused their parents' post-paid program. Pre-Paid is also great for transient/migrant workers, cheating spouses and those who are involved in illegal activities. How many times have you seen them refer to a disposable cell on the tv show LAW & ORDER? Pre-Paid is also great for people visiting the country as it is much more affordable then paying roaming charges.
