4G is all the rage in mobile phone technology. But all that speed, 5 times faster than the already quick 3G download speeds and connectivity times, comes through the advent of new technology, which means higher priced phones. The higher pricing on the 4G capable smartphones, sometimes $149 or more even with a two year contract, means 3G phone prices are plummeting. That spells oceans of opportunity for smaller, regional prepaid companies like Leap. This recent market share switch was reported by Citadel Securities.
And even better news for these small “Mom and Pop” companies is this is business coming to them without them having to pay for expensive advertising. They certainly can’t compete on level ground for market share with the big boys, so these marketplace changes are a welcome gift that these wireless providers need to take advantage of before the momentum shifts again.
The aforementioned Leap Wireless uses third-generation Evolution Data Optimized (EvDO) technology, and they are poised to find a hot market niche as the smartphone 4G prices rise above the threshold $200 mark. Many 3G phones with many multimedia features and great processors and touch screens can be had for as little as $29, and even free, so the market is definitely leaning in the favorable direction of the “little guys” in the mobile phone marketplace.
As an example, take a look at the entry of the super-popular iPhone 4. When it hit, the still dependable and fast iPhone 3GS, with many of the same features as the iPhone 4, was dropped to an almost free $49. This absolutely stung sales of phones like the 4G Motorola Atrix 4G. MetroPCS is another smaller carries who has already spent millions on the development of their own 4G LTE network, so they are not in as favorable a position as a company like Leap.
The global economic downturn of the past 4 years can also be seen as a benefit to smaller prepaid services. Many offer unlimited Text, Calls and Internet for around $40 a month with no contract, and will even give you a phone for free. That’s something the big boys can’t begin to match.
