The world is young. The young prefer prepaid plans.

Nielsen looks at some of the larger smartphone markets. Wherever price is of paramount concern, young buyers, who have to have a mobile device, choose prepaid plans.

The overwhelming majority of young Brazilians (90%) prefer the prepaid mode of payment to the postpaid, ranking third behind Russia and India. Considering that more than half (56%) of Brazilian consumers aged 15–24 pay their own mobile phone bills, they are careful to not incur big overuse charges. Comparatively, only one in four consumers in the U.S. and Spain aged 15–24 pay for their own phones and only one in five young Italians do. About half of Russian (47%), British (52%) and German (56%) consumers pay for their own mobile phones as do one-third (35%) of Indian consumers.

Smartphone makers, like Apple, that rely on premium subsidies from carriers, which the carriers offset with expensive, long-term contracts, are not under threat. The market is too big, growing too fast. But, if they want to increase market share, they will need to embrace prepaid and make devices that are affordable. Assume a two-year window. By summer 2012, say, an iPhone 4 should be available, without a contract, for under $200. At most.