Though T MOBILE US INC (NYSE:TMUS) is far from the leader in cellular service, it’s still a well-known company that has remained competitive against larger companies such as AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ). Converting its business model is a risky maneuver, but it may be a very smart one as well. T MOBILE US INC (NYSE:TMUS)’s larger peers are sadly lacking when it comes to affordable, feature-rich prepaid options.
Coming out on top
If you’re an investor looking to take advantage of the growing smartphone market, you have a number of options available to you. Unfortunately, many of your options are expensive, and have other factors that can have a major impact on profitability.
Both Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) can be a good buy, though you should be careful when buying into a high-priced popular stock. Much of its value may be accounted for by the time its price reaches into the hundreds of dollars. Apple could see additional growth if it gets back into the business of innovation, though tweaks to existing products will take it only so far. Reviving Motorola Solutions Inc (NYSE:MSI) with the Moto X could carry Google higher, but that’s only if the phone becomes popular.
Investing in carriers such as T MOBILE US INC (NYSE:TMUS) that are trying to innovate with their services may be a better option. Currently, contracts that include data plans are typically more expensive than prepaid service even with the cost of phone subsidies. With T MOBILE US INC (NYSE:TMUS)’s conversion, you can expect a push in upcoming years to convert more consumers to prepaid. The companies that offer the best prepaid services will benefit greatly, and T MOBILE US INC (NYSE:TMUS) currently has one of the best prepaid packages available from the major carriers.
John Casteele owns shares of Apple. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article How You Can Prevail in the Smartphone Wars originally appeared on Fool.com is written by John Casteele.
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