NEW YORK — Affordable is the adjective that suppliers are using more often to describe new smartphones in a market shifting rapidly from a subsidized-phone business model.
No-contract prepaid-service phones with little or no subsidy are gaining market share, and carriers are weaning post-paid subscribers off subsidies through installment plans that let consumers choose unsubsidized phones in return for lower service prices.
Alcatel OneTouch, LG, HTC and FreedomPop all unveiled low-cost smartphones in recent days, though Samsung launched a high-end model, the Galaxy Alpha with metal band, at $612 without contract for the AT&T network.
Sales of prepaid phone accounted for 10 percent of cellphone sales in 2011, 17 percent in 2012, 25 percent in 2013 and 34 percent through the first eight months of 2014, according to The NPD Group.
For its part, AT&T touts the growing take rate of no-contract postpaid phones sold without subsidies. In its second fiscal quarter, about 44 percent of the postpaid smartphone customers were on Mobile Share Value plans, which offer lower service prices to consumers who buy unsubsidized devices.
Here’s what different vendors launched in affordable smartphones:
Alcatel OneTouch: The company expanded its smartphone selection through prepaid-MVNO TracFone and TracFone’s Straight Talk brand, which is available exclusively in Walmart.
The phone maker’s smartphone selection with Straight Talk service will go to four from one in October with the launch of three new models at Walmart. Two feature LTE.
The three new Straight Talk phones are the Popo Mega LTE at less than $250, Popo Star LTE at less than $150, and 3G Popo Icon at less than $150. The former two are described by the company as “two of the most affordable LTE devices in the market.”
The $250 Pop Star Mega features Android 4.3 OS, 6-inch qHD 540 by 960 display, 1.2GHz quad-core processor, 1GB RAM, 4GB embedded memory, 32GB MicroSD slot and FM radio. The $150 Pop Star LTE, also an Android 4.3 model, features a 4-inch WVGA 480 by 800 display, 1.2GHz quad-core processor, 1GB RAM, 4GB memory, 32GB card slot and FM radio.
FreedomPop: The no-contract MVNO, which offers free and low-cost wireless voice and data plans, is launching its first private-label tablets and first private-label handset so it can hit price points of less than $100.
The first device, an $89 6.7-inch Wi-Fionly Android tablet, marks the MVNO’s entry into Wi-Fi calling. Two other planned devices are the $99 Frenzy 7-inch Android LTE tablet and an $89 Android phone. Those two models will offer LTE data and cellular voice and texting via VoIP.
“There is a huge void in the lowend, sub-$100 market,” said COO Steven Sesar.
The company will continue to sell refurbished phones at higher prices.
The first FreedomPop-brand device is the $89-suggested Wi-Fi-only Liberty Android tablet with 6.7-inch display. It lacks cellular but can be used with a FreedomPop phone number to place Wi-Fi calls and send texts as well as access the Internet. Users get 200 free Wi-Fi voice minutes and 500 free Wi-Fi texts per month, and for $4.99/month, they can get unlimited voice/text service. Data over Wi-Fi is unlimited in either case.
In November, the company will offer the Frenzy 10-inch Android LTE tablet with 4GB of memory at $99. It will offer cellular voice and texting via VoIP and will be followed in the coming months by an $89 LTE Android phone.
HTC: The company’s Desire 510 smartphone, promoted as the company’s most affordable LTE phone to date, gained U.S. distribution with the launch by Sprint for Sprint postpaid plans and the launch by Sprint’s two prepaid brands, Boost Mobile and Virgin Mobile.
The prepaid brands priced it at $99 without contract. With Sprint postpaid plans and contract, the phone is priced at $0 down and 24 monthly payments of $9 for a total of $216.
Virgin Mobile customers will be able to order a 510 on Virgin’s online store “soon,” a spokesperson said. The new model features triband LTE, 4.7-inch FWVGA screen, Android 4.4, quad-core 1.2GHz processor, 1GB RAM, 8GB memory, 128GB MicroSD slot and HD Voice.
LG: A new LTE smartphone targeted to consumers upgrading to LTE in Europe, Asia and the Americas began rolling out last week.
The quad-core 4.5-inch F60, said Dr. Jong-seok Park, president/CEO of LG Electronics Mobile Communications, delivers “a premium user experience” at what he called “a reasonable price.”
The Android 4.4.2 phone features 1.2GHz quad-core processor, 1GB RAM, 4GB or 8GB of embedded memory, 4.5-inch IPS WVGA display with 207 ppi, 2,100 mAh battery, and 5- and 1.3-megapixel cameras. The F60 comes with LG’s proprietary UI features appearing in the flagship G3.