John Paczkowski

Recent Posts by John Paczkowski

AT&T: Thank God for Vitamin i


Reporting better-than-expected second-quarter earnings this morning, AT&T said it activated 2.4 million iPhone accounts–35 percent of them for new customers. And it saw its wireless data revenue rise 37.2 percent to $3.4 billion and subscriber churn fall to 1.09 percent, a record low.

Clearly, the debut of the iPhone 3GS and Apple’s decision to cut the price of the low-end iPhone to $99 had an enormous impact on AT&T’s bottom line. “AT&T iPhone subscribers, both new customers and upgrades, take two-year contracts with data packages,” the company said. “As a result, robust iPhone demand drives strong recurring revenues and substantial long-term value.”


Litter wonder, then, AT&T (T) is said to be doing it all it can to renew its iPhone exclusivity deal. The company is clearly dependent on the device for some of its most recent gains.

In fact, Commresearch analyst Gregory Lundberg says that were the iPhone to be excluded from the company’s latest financials, 25 percent fewer people would have signed up for its service in the second quarter than in the first. So if it’s true that Verizon (VZ) is in talks with Apple (AAPL) about adding the iPhone to its product lineup, AT&T has a lot to worry about, indeed.

As Pali Research recently noted, “As the iPhone exclusivity period rolls off between AT&T Wireless and Apple, a material number of AT&T customers will flock to Verizon’s superior network. We estimate that nearly a third of AT&T’s post-paid customers are being retained by AT&T primarily because of the iPhone exclusivity.”

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