People are just trying to get the best long-term deal, says Stephen Baker at the NPD Group:

“In a quarter without a major product launch from either of the two market leaders, consumers refocused their attention away from the postpaid wars and toward finding the best value for their dollar.”

Those two market leaders, of course, are Samsung and Apple. But Apple is hardly even a participant in the prepaid market.

The portion of the market sold prepaid has been increasing for years, says Baker.

“Sales of prepaid smartphones doubled from the previous year, continuing a string of more than 12 quarters of triple-digit sales increases.”

Apple’s share looks tiny, especially in a U.S. market where it has dominant market share, but it has quadrupled year-over-year since the first quarter of 2012. However, with the prepaid market growing so quickly, Apple’s latest –and typically expensive — phones have not been the big sellers. Rather, it’s the year-old iPhone 4S that is Apple’s leading contender in prepaid, just as one of Samsung’s top prepaid sellers is the now somewhat aged Galaxy S II.

Even outdated models get pricy — the iPhone 4S can cost $400 to $600 unlocked and brand-new, while the Galaxy S II can be between $300 and $400. But consumers make up the heavy upfront cost by saving on cheaper plans, potentially saving hundreds, if not a thousand dollars over the lifetime of their phones.

For Apple, however, capitalizing fully on this fast-emerging market trend means bringing out a cheaper iPhone that can be sold as a new, current model-year device at a price point closer to Android models from Samsung and LG. And Samsung has some work to do, too — while its market share remained stable from 2012 to 2013, competitors such as Apple and HTC have gained share.

Where are people buying prepaid phones? Mostly at retail, NPD says.

“Prepaid has proven to be a real winner for national retailers,” said Baker. “The easy purchase cycle and grab-and-go nature of the product play into the strength of large-format stores. Certainly, companies like AT&T recognize this shift in purchasing as they ramp up their focus on prepaid phones with their recently announced ‘Aio’ product branding initiative.”

Nomanini is a social enterprise company that sells a “business in a box.” Called Lula, this portable orange device is like a little digital vending machine for prepaid vouchers for mobile airtime, electricity, water, and insurance. (Many in Africa use prepaid mobile to pay for such services.) People can buy one of Nomanini’s boxes and quickly set up a “mini-business” to supplement their incomes.

Chief executive and founder Vahid Monadjem is an Iranian-American who was born in Germany and raised in the U.S. and Swaziland. In 2008, he took a job with the prestigious consulting firm McKinsey, where he worked as a global fellow for emerging market product development. From his post in Johannesburg, South Africa, Monadjem found that reaching consumers was his biggest challenge. Most people do not have computers, Internet access, or even smartphones, and many do not even have a documented home address. Mobile prepaid services are so popular because they don’t require Internet access or a bank account, and you can purchase them in small or large amounts.

In this problem, Monadjem saw an opportunity for himself and the locals. He left McKinsey to found Nomanini, which means “anytime” in Zulu, in 2010.

“There are about 200,000 minibus taxis driving around South Africa serving 20 million commuters everyday,” Monadjem said. “It occurred to me that the sale of prepaid vouchers could more efficient if we developed a solution that could be distributed to people on minibus taxis. Not only would you be providing a really important service for people living at the base of the [economic] pyramid who need these central services, but you would also be giving a massive sector the benefit of additional income.”

The Lula can print these prepaid vouchers on the go. Owners can sell the vouchers anywhere, in minibuses, their homes, or even just walking around on the street. They deposit their earnings into a Nomanini account to reload the terminal and earn a commission on all of their sales. The terminal costs about $200 and is “built like a truck” to endure whatever Africa can throw at it. The backend system and all of the transactions are run on the Google App Engine.

In December, 40,000 people bought airtime through Lula devices. Monadjem told me stories of Vuyile, a man who worked as a night shift security guard and barely earned enough to support his family. Through Nomanini, he has increased his monthly income by 20 percent.

The success of the business is largely due to the Nomanini’s intimate understanding of the African market. Monadjem and his cofounders strived to develop a uniquely “South African born-and-bred solution” that specifically targets the needs of the local population.

“What is missing with a lot of tech efforts in Africa is learning from the market,” he said. “Rather than importing the latest solution from the U.S. or Europe, we need homegrown solutions, particularly in transactions. There is massive expansion in the mobile space, but we need to build solutions that work with unreliable networks, poor internet connections, and a user that may be screen illiterate. If Nomanini is successful, hopefully we will get another set of entrepreneurs to be thinking about Africa as a target market rather than trying to build a video-sharing service.”

Right now, Nomanini is only active in South Africa, but the company has received requests for the boxes from all over the continent. Projects for Kenya and Nigeria are in the pipeline as well as plans to sell additional types of vouchers.

Startup Spotlight is a new weekly series that features a company with a unique idea or story to tell. If you want us to consider your company, please submit an application at http://venturebeat.com/news-tips.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

If you’re going broke but still need to own a smartphone, Verizon’s new prepaid plans are aimed at you.

Built with budgets in mind, the new plans offer unlimited voice and texting, but vary based on how much data you sign up for: For $60, you get 500MB of data, and for $70 you 2GB. 

Of course, any mildly intelligent person would be intellectually obligated to go for the 2GB plan, which offers four times the data as the cheaper plan for just $10 more. And make no mistake — that’s exactly what Verizon wants you to do.

One main caveat to the new plans is that they only work with 3G phones like the iPhone 4,  iPhone 4S, and the various BlackBerry models. That may sound like a bad thing, but it actually isn’t: Who in their right mind is going to use an LTE phone with a 500MB dataplan? The data wouldn’t make it a week.

The other main caveat comes from the plans themselves, which aren’t the best deal when compared to, say, T-Mobile’s $50-per-month plan or even Walmart’s $45 Straight Talk plan. Unless you’re absolutely in love with Verizon, it’s tough to recommend its new prepaid plans.

Photo:Flickr/Eric Hauser 

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

RadioShack is about to become more than just your local electronics retailer.

Starting tomorrow, RadioShack will offer contract-free cell phone plans with pre-paid carrier Cricket Wireless. The service, dubbed No-Contract Wireless, will offer plans for both feature phones and smartphones: Feature phone plans start at $25 a month, while the most basic smartphone plan will run for $40 a month. Both plans come with throttled bandwidth, so don’t sign up if limited speeds aren’t your thing.

In addition to the plans, RadioShack will also offer No-Contract Wireless subscribers free access to Cricket’s Muve Music streaming service.

RadioShack will start things off on Wednesday with the Huawei Mercury Ice and Huawei Pllar, two budget phones priced at $149 and $39, respectively. While neither phone is likely to turn heads, both come free of contract, which will automatically make them more attractive to the price-conscious. RadioShack says that the pair will be joined by two others devices by the end of the month.

Could one of those devices be the iPhone? Earlier this year, Cricket became the first pre-paid service provider to offer the Apple device, which means it’s not entirely unlikely that No-Contract Wireless will go a similar route with the iPhone 4 or 4S.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

What’s Samsung’s best-selling phone in the US? Hint: It’s not one of the company’s flagship Galaxy S smartphones.

The Apple v. Samsung trial continues to reveal juicy details about both companies, with the latest public court filing breaking down just how many phones they sold over the past two years, AllThingsD first reported.

The biggest surprise? Samsung’s most popular phone in America has been the Galaxy Prevail, a mid-level phone on prepaid provider Boost Mobile. Samsung sold 2.25 million units of the Galaxy Prevail out of a total 21.21 million phones sold between June 2010 and June 2012, the filing shows.

In second place for Samsung was the Epic 4G on Sprint, which sold 1.89 million units and was also its biggest revenue generator, bringing in $855 million. The company sold 4.1 million of its Galaxy S II models in total.

The Galaxy Prevail’s success shouldn’t be that surprising: It’s Samsung’s cheapest mid-range smartphone, and since it’s on the prepaid carrier Boost Mobile, it doesn’t come with the same hefty monthly fees as contracted smartphones. The Prevail may be unsexy, but it’s a damn good deal for consumers.

The same documents also bring up questions about Samsung’s reported table sales, Fortune’s Philip Elmer-Dewitt points out. While Samsung boasted that it sold more than 2 million Galaxy Tabs in early 2011, the filing shows that the company sold only 262,000 tablets in the U.S. during the fourth quarter of 2010 and 77,000 during the first quarter of 2011. Those numbers don’t include overseas sales, but even counting those, Samsung’s numbers seem a bit inflated.

The filing unfortunately doesn’t break down Apple’s device sales beyond iPhone, iPod Touch, and iPad. Apple sold 85 million iPhones during the period (worth $50 billion in revenue) and 34 million iPads ($19 billion in revenue). The iPod Touch is no slouch either, with 46 million units sold earning $1o.3 billion.

Check out the court filing below (via CNet):

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

With the next iPhone on the horizon, all signs point to an imminent demise for the iPhone 3GS. Apple, however, has other plans.

Apple’s aging third generation smartphone will live on as the company targets emerging markets not dominated by the iPhone 4S, AppleInsider reports, based on a note from Jefferies Analyst Peter Misek.

But does the notion hold any weight?

While Apple rules the higher-end, contract-fueled part of the smartphone market, the lower, emerging end is dominated by feature phones and less-advanced Android devices. This leaves Apple without a real contender in the low-end space.

“Emerging,” in this case, refers to a market’s general potential for growth. Emerging markets are untapped ones, and, as a result, are the very kinds of markets that growth-focused companies are constantly looking it.

One of the most significant emerging areas are prepaid markets where consumers are less likely to sign pricy two-year contracts. These types of consumers are more sensitive to price in general, which is why its key here to keep low the prices of off-contract phones.

Currently $375, the off-contract iPhone 3GS is far, far north of an attractive, mass market price point. This is why Apple would likely push that price down to roughly $200, making the device the same purchase price as an on-contract iPhone 4S and double the price of an on-contract iPhone 4. (Apple already offers the 3GS for free in America with a two-year contract.)

One problem, though, is age. Released in June 2009, the 3GS is at this point almost three years old. That may not seem too old, but smartphones age fast, and three years is basically decades in technology time.

This means that, as cheap as a developing market 3GS would be, the device’s age would very rapidly show, especially as Apple transitions to the next version of iOS.

The trick, then would be figuring out a way to update the device slightly while keeping it at a price friendly to more price-sensitive consumers.

Photo via Flickr user MJ/TR. 

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Apparently, top U.S. wireless carrier Verizon isn’t satisfied with having what’s widely regarded as the best wireless network and the largest subscriber base.

The carrier today announced plans to offer a new unlimited text, talk and data plan that costs just $50 for pre-paid customers, reports the Wall Street Journal.

The move by Verizon is likely to hurt both growth and profits from the country’s third largest carrier Sprint, which operates several pre-paid mobile companies like Virgin Mobile, Boost Mobile, Clear and MetroPCS. Pre-paid accounts for the bulk of Sprint’s total customer base, meaning increased competition from Verizon will definitely hurt.

As is the case with Sprint, Pre-paid customers who purchase Verizon’s new plan will have to choose from a limited selection of basic phones manufactured by LG, Samsung and Pantech. The plan, which is available Thursday, will roll out to all Verizon retail locations such as Walmart, Best Buy and Target.

[via Engadget]

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Update: After several comments from our readers and follow up with Loopt, it appears that the location-based check in application is preloaded on several smartphones, including the LG Optimus M and Huawei Ascend on MetroPCS (both Android) and also its BlackBerry Curve 8530.

Scvngr, the maker of a check-in app that asks users to complete activity challenges, today announced that it will now come preloaded on the LG Optimus V, the newest prepaid smartphone from Virgin Mobile USA (which is owned by Sprint).

While there’s no exclusivity with Virgin Mobile, the partnership marks the first time a location-based service will be preloaded on a smartphone. Foursquare cofounder Naveen Selvadurai alluded to a preloaded deal with Nokia back in September 2010, but it turned out the plans were to just include it in Nokia’s Ovi Store, according to Business Insider.

Scvngr differentiates itself from other check in services by adding activities and challenges to the mix. For the consumer, this may promote continued usage and battle check in fatigue – the realization that the check in experience ends with just sharing your location to friends. Challenges may include group check ins or completing a task at a particular store to earn a discount or coupon.

Founder and chief executive Seth Priebatsch told me that working with a major mobile carrier, like Virgin Mobile, has been part of the company’s roadmap, and it wants tow ork with major brands, as it did in an earlier partnership with major beverage distributor Coca-Cola.

While I couldn’t find a much research on whether having a preloaded app helps usage, a survey from market strategy firm iGR concluded that consumers do in fact like preloaded apps as it helps them explore and try new apps. More interestingly, the survey showed that a preloaded app can potentially generate 9.4 times the revenue for the operator as opposed to just offering it in the app store.

The Boston-based company, founded in 2008, previously raised a second round of funding of $15 million as well as a first round of $4 million, bringing the total funding to around $20 million.