AT&T Poised to Shatter Quarterly Smartphone Sales Record on iPhone 4S Surge

[MacRumors]

AT&T today announced that it sold approximately 6 million smartphones during the first two months of the fourth quarter, already approaching the company's record for quarterly sales of 6.1 million units set in the third quarter of last year. In particular, AT&T credits the strong performance of the iPhone 4S for the sales boost.

AT&T's strong smartphone sales in part reflect a higher number of handset upgrades from customers who were waiting for the launch of a new iPhone. AT&T previously announced that it activated more than 1 million iPhone 4S' in the first five days the device was available. AT&T said iPhone 4S sales remain strong.

AT&T's press release was accompanied by a regulatory filing noting that the strong sales will result in a negative impact on near-term earnings as the carrier absorbs the large subsidies it pays out for each handset. But beyond the short-term hit to earnings, the company expects those sales to result in improved performance over the long-term as it recoups those subsidies over the two-year terms of customers' service contracts.

The higher number of upgrades indicates that customers have continued to stay with AT&T in record numbers even in a very competitive environment, with more carriers than ever selling the iPhone. Also consistent with AT&T's earlier guidance, these record smartphone sales are expected to have a near-term negative impact on margins and therefore earnings. However, AT&T expects that these postpaid customers over time will benefit the Company as, historically, postpaid customers produce stable revenue, reflecting their contract term, and higher average revenue per subscriber, including stronger data usage, than other customer categories.

In addition to the iPhone 4S, AT&T also offers the new 8 GB iPhone 4 and is the exclusive U.S. carrier for the iPhone 3GS. Those lower-end devices have also proven popular with customers, continuing to drive sales growth for the carrier.

Article Link: AT&T Poised to Shatter Quarterly Smartphone Sales Record on iPhone 4S Surge

 

[Lordskelic]

Yay! Now AT&T's network can be even more overloaded!

 

[Risasi]

I haven't noticed any worse service, not that it's generally as good as Verizon. But honestly, all cell companies are a pain in the butt...

 

[acidfast7]

LOL at American mobile phone contracts lining AT&T's pockets.

$2000 / 2 years

 

[samcraig]

LOL at American mobile phone contracts lining AT&T's pockets.

$2000 / 2 years

but no one balks when Apple makes record profits/has premium pricing for their hardware? Ok....

 

[*LTD*]

but no one balks when Apple makes record profits/has premium pricing for their hardware? Ok....

They're not the same.

 

[Consultant]

LOL at American mobile phone contracts lining AT&T's pockets.

$2000 / 2 years

Larger country size = more difficult to have coverage everywhere.
Populated area: people not in my backyard.

 

[dgree03]

but no one balks when Apple makes record profits/has premium pricing for their hardware? Ok....

That would require rational. We both know that is scarce around this part of the internetz

 

[dvdlovr24]

LOL at American mobile phone contracts lining AT&T's pockets.

$2000 / 2 years

I've never understood this argument. You have to pay a carrier to get service. So I don't see the problem with staying for two years and not having to pay the full price of the phone. It's not like I get a cheaper monthly rate if I pay full price for my phone.

 

[samcraig]

That would require rational. We both know that is scarce around this part of the internetz

Clearly as I was down voted for stating so.

So it's ok if Apple makes money and sells at premium prices but ATT shouldn't make a profit or charge their customers so they can build out their infrastructure to support Apple's products like the iPhone/iPad.

Got it. Just wanted to make sure I know who I should or shouldn't be "cheer leading"

 

[bruinsrme]

They're not the same.

Are you suggesting ATT is over charging for their services the provide?

 

[Diode]

but no one balks when Apple makes record profits/has premium pricing for their hardware? Ok....

The difference being - cell service in the US is a borderline government supported monopoly while Apple exist in a highly competitive computer market.

People pay the premium to Apple because they favor the computer over one from Dell, IBM, Alien, building yourself and the list goes on.

People pay this premium to AT&T because they have little other choices. You could argue prepaid on a MNVO but guess what - they use the big three networks and thus are bound by their terms (throttling data to make post paid more attractive etc).

You can't start a new carrier in the US because the FCC won't allow it. You can easily start a new computer company. The threat of entry is why Apple continues to innovate (and drive huge profits) while AT&T drags it's feet and can still pull record profits.

 

[samcraig]

The difference being - cell service in the US is a borderline government supported monopoly.

People pay the premium because they favor the computer over one from Dell, IBM, Alien the list goes on.

People pay this to AT&T because they have little other choices.

You can't start a new GSM carrier in the US because the FCC won't allow it. You can easily start a new computer company. The threat of entry is why Apple continues to innovate (and drive huge profits) while AT&T drags it's feet and can still pull record profits.

All the carriers in the US are pretty similar. The hatred towards ATT specifically makes no sense. If you want to be an equal opportunity disgruntled customer that's another matter.

 

[Diode]

All the carriers in the US are pretty similar. The hatred towards ATT specifically makes no sense. If you want to be an equal opportunity disgruntled customer that's another matter.

Yea sorry if I wasn't clear - I meant cell service in general in the US. They have little incentive to pass savings on to the consumer because there is virtually no competition with how fragmented the networks are.

Thus we pay high fees for crappy service.

 

[hobo.hopkins]

I don't think anyone should be very surprised by this; not after the pent-up demand for a new iPhone was finally released.

 

[alent1234]

The difference being - cell service in the US is a borderline government supported monopoly while Apple exist in a highly competitive computer market.

People pay the premium to Apple because they favor the computer over one from Dell, IBM, Alien, building yourself and the list goes on.

People pay this premium to AT&T because they have little other choices. You could argue prepaid on a MNVO but guess what - they use the big three networks and thus are bound by their terms (throttling data to make post paid more attractive etc).

You can't start a new carrier in the US because the FCC won't allow it. You can easily start a new computer company. The threat of entry is why Apple continues to innovate (and drive huge profits) while AT&T drags it's feet and can still pull record profits.

even in europe you have to pay for the frequency licenses. and i've seen some of the European smartphone plans, rip off

 

[samcraig]

Yea sorry if I wasn't clear - I meant cell service in general in the US. They have little incentive to pass savings on to the consumer because there is virtually no competition with how fragmented the networks are.

Thus we pay high fees for crappy service.

While I would love to pay less - with a FAN discount I am paying about $70 a month. That's 1680 for two years. Now factor that I paid 199 for my phone and I'm guessing that ATT's "price" is - let's say 600. So that's 1280 they are getting for "service" - appx 54 a month. For unlimited data/450 minutes I see that as "ok"

But that's my scenario.

 

[dgree03]

While I would love to pay less - with a FAN discount I am paying about $70 a month. That's 1680 for two years. Now factor that I paid 199 for my phone and I'm guessing that ATT's "price" is - let's say 600. So that's 1280 they are getting for "service" - appx 54 a month. For unlimited data/450 minutes I see that as "ok"

But that's my scenario.

I dont understand why people always talk about cost by adding the total amount over 2 years?

It seems that would not matter because ANY SMARTPHONE you buy will be subject to the same cost. Carriers don't discount service for buying a phone full price. So smart people should always buy on contract unless(like me) they like switching phone services and phones frequently. To me cost over 2 years is irrelevant, if I want a smartphone I gotta pay. Its that simple.

 

[acidfast7]

I've never understood this argument. You have to pay a carrier to get service. So I don't see the problem with staying for two years and not having to pay the full price of the phone. It's not like I get a cheaper monthly rate if I pay full price for my phone.

lol

that's the exact problem. you should be able to use a prepaid SIM/uSIM and pay per MB/GB/SMS/MMS/min and determine for yourself what is the cheaper option.

but you can't ... (maniacal laughter heard from AT&T board off stage)

 

[samcraig]

I dont understand why people always talk about cost by adding the total amount over 2 years?

It seems that would not matter because ANY SMARTPHONE you buy will be subject to the same cost. Carriers don't discount service for buying a phone full price. So smart people should always buy on contract unless(like me) they like switching phone services and phones frequently. To me cost over 2 years is irrelevant, if I want a smartphone I gotta pay. Its that simple.

That wasn't my intention. I don't think like that really. I'm just saying that a total of ~1600 for a phone and 2 years of service - to me - seems somewhat reasonable compared to what I've seen elsewhere in the US and overseas.

----------

lol

that's the exact problem. you should be able to use a prepaid SIM/uSIM and pay per MB/GB/SMS/MMS/min and determine for yourself what is the cheaper option.

but you can't ... (maniacal laughter heard from AT&T board off stage)

It's not just ATT though - so again - getting angry at JUST ATT seems a bit silly.

 

[acidfast7]

Larger country size = more difficult to have coverage everywhere.
Populated area: people not in my backyard.

:facepalm:

this isn't a coverage issue; it's a locked-in issue

----------

It's not just ATT though - so again - getting angry at JUST ATT seems a bit silly.

It's US mobile service in general. pre-iPhone it was cheaper/better than in the EU, now it's much more expensive when VAT/Taxes are considered.

 

[Thunderhawks]

Clearly as I was down voted for stating so.

So it's ok if Apple makes money and sells at premium prices but ATT shouldn't make a profit or charge their customers so they can build out their infrastructure to support Apple's products like the iPhone/iPad.

Got it. Just wanted to make sure I know who I should or shouldn't be "cheer leading"

Dumb argument by anybody to begrudge companies which make money.

That is the purpose why they are in business.

If whatever a company sells fits within my budget and the value for what I pay is okay, why would I care how much they make?

If they don't do what I want/need within these parameters I choose another company and won't care about their profits either.

Companies that make a profit have reserves to do things, invest into the future, employ more people as their business grows (not only their direct employees) etc. etc.

So, why the need of people to complain about Apples profit or the Apple tax?
They make great products. Don't like their products PC off!

All these complainers who make say 50,000 would certainly turn down a job that pays them a million and say that's too much. Yeah! Right

 

[Diode]

While I would love to pay less - with a FAN discount I am paying about $70 a month. That's 1680 for two years. Now factor that I paid 199 for my phone and I'm guessing that ATT's "price" is - let's say 600. So that's 1280 they are getting for "service" - appx 54 a month. For unlimited data/450 minutes I see that as "ok"

But that's my scenario.

Yea my big beef is no US carrier offers a discount for when you are out of contract. I'm out of contract and don't want another phone, why should I pay the same as you that just bought a subsidized phone?

Anyways minutes and texts these days cost the carrier virtually nothing. Plenty of MNVO's offer unlimited talk/text plans for $30~40/month or with data for $45~55/month.

Since they are purchasing these plans significantly cheaper from the carriers (and the carriers still turning a profit at these cheaper prices), something tells me plans could go a lot lower and carriers could still make a pretty penny. However they don't have to as there is little choice.

 

[samcraig]

Yea my big beef is no US carrier offers a discount for when you are out of contract. I'm out of contract and don't want another phone, why should I pay the same as you that just bought a subsidized phone?

Anyways minutes and texts these days cost the carrier virtually nothing. Plenty of MNVO's offer unlimited talk/text plans for $30~40/month or with data for $45~55/month.

Since they are purchasing these plans significantly cheaper from the carriers (and the carriers still turning a profit at these cheaper prices), something tells me plans could go a lot lower and carriers could still make a pretty penny. However they don't have to as there is little choice.

Business model is a bit different though. Those other companies don't have to support the infrastructure and their employee size is far less. For the major carriers - these deals are all gravy.

I don't disagree that US Cell carriers COULD charge less. But as I don't know their operating costs and future roadmaps specifically, I won't comment.

I do agree that when you are done paying subsidies and/or bring your own phone, your bill should go down.

 

[JGowan]

Here's the proof that everyone already knew about Apple's decline in the iPhone 4 during the 3rd Quarter that drove stock prices down by the idiots on Wall Street. Everyone and their mom (literally) was talking about getting the NEW iPhone *when* it finally would come out. Apple pushed the devices' usual release and WS made them pay for it, although they knew exactly what the deal was. ******s!

Any idiot would see that Apple would more than make up for "lost" sales as soon as the iPhone came out and low and behold, that very truth is being realized.