The cell phone industry is diverging into a competition between smart phones and prepaid plans.
Consumers now consider cell phones to be a necessity rather than a luxury, even when it comes to smart phones such as iPhones or Blackberries.
The recession has created a fiercely competitive market between smart phones and prepaid plans.
One group of mobile users is signing contracts and shelling out more in monthly service fees to upgrade to iPhones, Blackberries and other smart phones — essentially pocket-size computers that enable their owners to transmit e-mails or access the Web while they’re on the go.
A different group is bargain hunting, increasingly choosing prepaid, no-contract plans, offered by companies such as Cricket or Sprint’s Virgin and Boost brands.
“We believe that consumers who would in previous years have purchased ‘standard’ midrange devices either opted for less-expensive handsets or moved up the range to get more features for their money,” said Carolina Milanesi, a mobile devices analyst with Gartner Group.
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