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AT&T activates record 3.2m iPhones in summer

updated 08:40 am EDT, Thu October 22, 2009

AT&T adds a high 2m total customers

AT&T today provided results for what it says is one of the best summer quarters in its history. The company says it activated 3.2 million iPhones, the most ever in its history and a steep jump from 2.4 million in the spring. It comes despite the iPhone 3GS having launched the previous quarter and points to increasing demand for the phone between July and September.

About 40 percent of those customers were new to AT&T, the carrier says, indicating a sharp increase from 33 percent in the spring.

The iPhone is also now believed to have had less of a harmful effect on AT&T's expenses, which in the past have often been high as it has had to subsidize Apple's hardware. AT&T's average revenue per person has grown 3.8 percent year-to-year and its data revenue has surged 33.6 percent in the same period, with wireless revenue climbing 10 percent to $12.4 billion and its profit margins increasing from 33.5 percent to 38.5 percent. The combined growth has been more than enough to offset iPhone discounts, according to the company.

Apple's devices formed the majority of the 4.3 million "integrated" (3G, QWERTY keyboard) switched on during the period and contributed to a total addition of about two million total subscribers, bringing the carrier to 81.6 million total cellular customers. About 1.4 million of those new additions were postpaid (per-month) customers with the rest prepaid customers. Customer turnover was also at low levels and dropped from 1.69 percent to 1.43 percent, ranging as low as 1.17 percent for postpaid subscribers.

The move may have helped AT&T mitigate losses due to the recession as its earnings per share dropped only one cent from year to year at 54 cents per share.

AT&T's growth puts pressure on market leader Verizon and significantly closes the gap in their customer bases. Despite acquiring Alltel earlier this year, Verizon's lead has narrowed to just 6.1 million more customers ahead of its own quarterly results, which face uncertain prospects without a clear flagship device to bolster its customers.



By Electronista Staff
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Comments

  1. DanielSw

    Fresh-Faced Recruit

    Joined: Aug 2009

    0

    Good news!

    I think Apple and AT&T did the right thing to make their exclusive US agreements. It was a bold move, especially in the beginning, for both companies, and they probably needed each other's commitments in order to get everything working well. Maybe someone will write a book some day about all the gory details each company had to handle.

    The continuing success of the iPhone is evidence to me of the genius of Apple's fundamental "digital hub" vision of its hardware and software products integration with other systems.

    Though the fabled "desktop publishing" era preceded this "digital hub", that was yet another collaboration between entities, notably Adobe and Apple, each company contributing key technology which worked together to enable various sea changes in the society at large.

    Now, perhaps we're on the verge of yet another era of new technology in the form of Apple's rumored tablet. More and more publications are going totally electronic. It makes sense.

    With all this electronic media, the various issues with bandwidth and infrastructure will be vital. AT&T is probably in an all-out "sprint" to catch up and keep up with such demands.

  1. climacs

    Forum Regular

    Joined: Sep 2001

    +1

    @DanielSw

    it was only a good idea to make it exclusive, if you are an AT+T shareholder. The whole reason Apple was forced to seek an exclusive partner in the US is that our cellular networks are so very far behind those of the rest of the world. So Apple had to find a cellular partner it could convince to make the investment in upgrading their network, which should have already been made.

    The iPhone is sold in many other countries by competing carriers and Apple makes a lot more money by this arrangement. I look forward to the end of Apple's exclusivity with AT+T. I guaran-farking-tee you that a LOT of iPhone users will ditch AT+T at the first opportunity.

  1. Fast iBook

    Fresh-Faced Recruit

    Joined: Mar 2003

    0

    Impressed, but not surprised.

    I am totally impressed but not at all surprised with the iPhone subscriber base's growth for att. It is an amazing, mind blowing device, that literally keeps surprising me with new uses and things i had not expected which are good. It's funny, but you can't equate 1 to 1 these numbers with units sold or total market share for apple in the us, because there is also a large number of people who do not use att. Compare activated to sold to get that number.

    - A

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: Good news!

    There was NOTHING bold about the move. It was the same move so many other phone makers do (exclusive deals with specific carriers). And maybe you missed the part that its just a phone. The only thing different about how it would need to connect to ATT's networks and any other smartphone out there is the Visual Voicemail. The fact that one could unlock the iPhone from day one (or whenever someone figured it out) and got it to work on T-Mobile's network would be an indicator that ATT had very little to do with this. For, seriously, I can't imagine Apple was so incompetent about the software/hardware interactions that they'd need help, and then would be so stupid as to go to ATT looking for that help.

    As for ATT's commitment, when do we get to see those benefits? People still complain about dropped calls, the 3G network coverage is abysmal, and the rollout speeds has been horrible. On top of that, they apparently did such a crappy job getting the iPhone to work on their network in the first place (most likely for VV, since its the only special addition they needed to do), that it took them several months after the iPhone 3GS's release (which means it has taken them at least 6-9 months, for I doubt they started in June) to get MMS to work, and tethering still doesn't. But it does everywhere else in the world.

    If Apple really wanted to do well with the iphone, and showed what it really could do right up front, they probably would have been better off to ignore the US market and initially release it in Europe and Japan, where the networks are, as reports say, more advanced/mature.

  1. Arty50

    Mac Elite

    Joined: May 2000

    +1

    Yayyyy!!!

    3.2 million more subscribers on an already overtaxed network. Hooray for AT&T!!!

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