You won’t find the iPhone on MetroPCS, Cricket or Boost Mobile – or many other high-end smartphones, for that matter. Browse the selection of phones at any prepaid carrier and you’ll most likely walk away disappointed by both the selection and the price.
Unlike contract carriers, which can afford to deeply subsidize phones when they have you captive for two years, prepaid carriers have to offer phones at actual value, or with a tiny subsidy, since you can walk away from their service at any time.
But don’t think two-year contracts are getting you any bargain, either. “The consumer is paying for the phone,” says J.D. Power’s Parsons. “It’s either hidden in the contract, or you’re paying it in a one-time fee with a non-contract plan.”
Pawlikowski agrees. “With a contract, you’re signing up to repay the subsidy that you just got on the phone,” he says. “The idea is to pay back the expense over time with the contract. So with prepaid phones, there’s no guarantee. Sometimes you’ll get a subsidy on the boxed phones at Wal-Mart, but they’re very low-end phones anyway, so it’s not going to be that big a subsidy.”