According to a recent report from NPD, prepaid smartphones are increasing in popularity with U.S. consumers. In the first quarter, prepaid smartphones represented 32% of all smartphone sales, an increase of 11 percentage points year over year. Not only is this trend troubling for telecoms, which benefit from post-paid data plans, it could also spell trouble for Apple's (NASDAQ:AAPL) very expensive iPhone. In this video, Fool contributor Steve Heller examines the report and gives viewers a look at the competitive landscape.

Fool contributor Steve Heller owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.