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No-Contract Smart Phones Hit Market

Value shoppers who have held off on getting a smart phone because of the expensive plans now have an affordable option.

Two reasonably priced smart phones just came on the market from Cricket Wireless, a San Diego based provider that specializes in no-contract prepaid phones.

The Sanyo Zio and the Huawei Ascend operate on Google’s Android system. They are less expensive than the iPhone and the Blackberry.

“Our customers are looking for value. Historically, we have had a lot of customers who didn’t want to sign contracts, didn’t want to go through the credit-check process. So we offer a month-to-month alternative without a written contract,” said Matt Stoiber, Cricket’s vice president. “It’s really a mass market value proposition.”

Jorge Riquelme, executive director of the Bayside Community Center, a cradle-to-grave social services center in Linda Vista, said the company offers a much needed service for low-income people, especially minorities.

“Many of the communities that we see using Cricket in particular are attracted to the program not only because of the cost, but because there is no need for credit history, no I.D. It’s accessible and it’s based on cash,” Riquelme said. “Many of the services that our population needs are cash based.”

However, since there is no contract, the phones are not discounted. Customers will have to pay $250 up front for the Zio or $159 for the Ascend.

Stoiber says the carrier offers considerable savings compared to the monthly plan fees and two-year contracts offered by its competitors.

“Our smart phone rate plan is $55 a month for an Android device, which is we believe, more than 50 percent less expensive than national carriers and the devices are priced very competitively,” Stoiber says.

The Ascend is the first low-cost, no-contract Android device to hit the market. The Zio is also available from Sprint for $99, but with a two year contract.

Convenience and the benefit of constant access to email and the internet have driven sales up for this category of mobile phones. Today, smart phones comprise one out of four cell phones sold.

For low- and moderate- income minorities, many of whom don’t have a land-line or personal computers, an affordable smart phone could make a huge difference.

“I believe the service definitely helps bridge the technology gap, particularly for the low-income population. It’s an issue not only of cost, but easy access,” Riquelme said.

“The overall objective is helping bridge that gap that has excluded minority populations and low-income groups. So there are many benefits to this service.”

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