Analyst: Apple’s iPhone both a ‘blessing and a curse’ for AT&T

Apple Online Store“Nomura launched coverage of the telecom universe Monday evening, slapping a ‘buy’ rating on AT&T over Verizon and Sprint-Nextel, citing what they called ‘overly pessimistic’ sentiment on the company, which has ‘significant cash generation, a healthy and meaningful dividend and the likelihood of a large share repurchase announcement in the near term,'” Matt Phillips reports for The Wall Street Journal.

“And while the expected announcement of a Verizon iPhone will likely mean Verizon will take share, the end of iPhone exclusivity AT&T might not be all bad for Ma Bell,” Phillips reports. “AT&T had to fork over fat subsidies as part of its exclusivity agreement with Jobs & Co. That’s been a weight on margins… One caveat however, is if AT&T and Verizon choose to engage in a price battle for share over iPhone users by boosting subsidies they pay for the phones, ‘which would impact the bull case of rapidly expanding margins in a lower gross-add environment.'”

Read more in the full article here.


  1. Att will pay the same now, next year. The BS from these so-called experts. The ASP this Q will be higher than the $610 last Q. I say the ASP this Q will be at least $628. This despite Germany and other countries losing exclusivity.

  2. At silverhawk

    I agree with you that the price of the phone against the 2-year cost of the plan is small.

    However that does not make it meaningless. Look what happened at Radio Shack when they gave $50 off. This is particularly true when you look at people giving the phone as a gift. They get to keep the $50 discount while the receiver may have to pay the plan.

  3. The only “curse” the iPhone has brought to AT&T is exposing the utter inadequacy of AT&T’s network. Otherwise, it’s been all gravy despite the moaning and groaning about iPhone subsidies. They richly deserve every word of criticism directed at them by unhappy iPhone customers, as well as every penny of lost revenue due to the upcoming mass defection to Verizon.

  4. @alansky

    Not true. The same thing would have happened to VZ. The iPhone was more more a phenomenon thanh anyone thought. They have done a lot since they now have the fastest 3G in the US. They are now behind VZ in LTE, but should catch up in 2011.

    Their customer service is best in nation; pricing module is cheaper than VZ with it’s “nickel and dime you to death” way of pricing, etc, etc, etc.

    Maybe your AT&T service or coverage isn’t as good as it is in 90% of Texas, but, if so, it’s where you choose to live that is the problem. Don’t move to Texas, please. We have our own brand of rednecks–the best rednecks in the country,

  5. > The iPhone was more more a phenomenon
    > thanh anyone thought

    Even the most casual user saw millions of iPhones being sold in 2007. (AT&T wasn’t aware of it?) And then again in 2008, even higher sales. (and AT&T didn’t notice it?) And then once again in 2009 and 2010?

    Just how many *YEARS* can AT&T (and you) keep using the same excuse of “gee, we didn’t know the iPhone was selling in astronomical numbers during all those years it was on our network”????

    “We had absolutely no idea the iPhone used a lot of data bandwidth”.

    Sheezessss. Even my 10 year old kid knew it.

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