AT&T profit beats estimates as Apple iPhone attracts customers

Apple Online Store“AT&T Inc., the largest U.S. phone company, posted first-quarter profit that exceeded analysts’ projections after attracting wireless customers with devices like the iPhone,” Amy Thomson reports for Bloomberg.

“AT&T said today that earnings were 59 cents a share, excluding costs tied to new U.S. health-care legislation. That beat the 55-cent average of estimates in a Bloomberg survey,” Thomson reports. “The company, which offers Apple Inc.’s iPhone in the U.S., activated a net new 2.7 million devices last quarter.”

Thomson reports, “AT&T’s exclusive hold on the device has helped the carrier keep customers, with turnover rates dropping to 1.3 percent… The iPhone is ‘extremely important for them, which is a good and a bad thing,’ said Chris King, a Baltimore-based analyst at Stifel Nicolaus & Co. ‘It’s a good thing today because without it, they’d be sunk.’ He advises investors to buy the shares.'”

Full article here.


  1. I sure hope that AT&T;knows they’re only posting a profit because of Apple users really don’t have a choice.

    Moreso, I hope they put more effort into getting that infrastructure off ground level and put it to where they deserve our imposed $30 a month for data service. Right now, I think it’s worth about $9-13 a month.

  2. AT&T;is exhibiting classic monopolist behavior by relying on their exclusive arrangement, and doing too little to build customer loyalty. If they lost their exclusive, many of their customers would move right over to another service that offered tethering or a more extensive network. In my experience, AT&T;is not the reason I am with AT&T;- it is the iPhone. I say this as someone who lives in an area with pretty good coverage. Coverage is not a bragging point any more – it is what subscribers expect as the bare minimum. At each point, AT&T;was behind the curve, racing to catch up with Apple’s momentum. After the first few quarters, though, their lack of imagination and speed is inexcusable.

    I don’t know if AT&T;will lose their exclusive. It seems likely, so if I was the ceo, giving iPhone lovers as many reasons as possible to stay with AT&T;would be my top priority. AT&T;signed up the iPhone, hoping it would be a hit. It was. Now, AT&T;, stop staggering in shock that this worked out, and make it a relationship that your customers want to maintain, as opposed to having to maintain.

  3. Somewhere in the equation, ATT recoups the costs associated with their subsidy of the iPhone, either in the basic subscription or the data plan (probably the data plan). This distorts both the value of the iPhone and the data plan. The data plan must be higher than reasonable to cover the subsidy and the iPhone is no longer acquired on the basis of its value vs cost, but on a “Can I make the payments?” basis, the payments being embedded in the data plan.

    Selling iPhones like used cars may move product, but it lacks the moral fiber usually found in dealing with Apple. I’d pay full price for an unlocked iPhone and be an ATT customer if they would use the iPad data plan. I won’t indenture myself to ATT on the promise of “Low monthly payments.” I would if the data plan would go away after the period of my servitude, but it doesn’t. Month 25 for ATT is all gravy and way over priced for the benefit I would gain.

  4. We are witnessing a very good example of Apple’s corporate behavior. AT-T, warts and all, is being rewarded by Apple for their loyalty and willingness to have blind faith in a product from Apple they had never seen.

    I think this is a significant statement; one worth pondering. How many corporations are there who will sacrifice possible profit and market share for the sake of rewarding a partner who took a gamble with them? Both Apple and AT-T should be praised, not buried, for this.

  5. @lurker

    I couldn’t agree with you more. The data plan is too expensive. I justify the $30/month because I love my iPhone so much. My wife doesn’t have an iPhone and I think she would love it, but I am not going to spend $60 between the two of us just for cell phone data plans. That’s ridiculous.

    If I could buy the new iPhone this summer at full price and not have a required $30 data plan, I would buy 2 of them. Either that or ATT needs to offer tiered pricing and/or a family data plan that is less than $60. It wouldn’t even have to be unlimited.

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