Sam OliveriPhone activations increased by a million in the first quarter of 2011, with 23 percent of those subscribers new to AT&T. iPhone subscriber churn, or customer turnover, was unchanged from a year ago.
The numbers suggest that the immediate impact of the Verizon iPhone launch during the quarter was not as great as some had predicted. AT&T has long been maligned for the performance of its network, particularly by iPhone owners.
Though Verizon has a larger 3G network footprint and its customers experience fewer dropped calls, it also has a 3G network that is much slower than AT&T. In addition, Verizon's CDMA network does not allow simultaneous voice and data connections, while AT&T's does.
Though iPhone sales at AT&T were strong, sales of 3G-capable tablets, including the iPad, disappointed. AT&T reported that only 322,000 new tablet subscribers were added in the quarter, with more than 80 percent of those booked to the prepaid category.
Considering the strong debut for the iPad 2 during the quarter, the numbers would suggest that the 3G-capable iPad is not a popular option for consumers. Apple and its carrier partners sell different iPad models with integrated 3G radios for the AT&T and Verizon networks.
AT&T added 62,000 customers in the quarter, which beat analyst expectations. According to analysts polled by Reuters, Wall Street watchers expected AT&T to report a net loss of 83,000 customers following the launch of the Verizon iPhone.
Still, Apple's new partnership with Verizon clearly had a impact, as AT&T's new activations were significantly reduced from 400,000 in the previous quarter. Verizon will report its own earnings on Thursday, while Apple is set to reveal its earnings this evening in a conference call at 5 p.m. Eastern.
AT&T's earnings increased to $3.4 billion, or 57 cents per share. Revenue was up 2.3 percent to $31.25 billion.
"We delivered another robust mobile broadband growth quarter for a very solid start to the year," said Randall Stephenson, AT&T chairman and chief executive officer. "We posted double-digit wireless revenue growth, and we set new first-quarter records in total net adds, connected device net adds and smartphone sales. Growth in tablets and other branded computing subscribers also continues to be strong."
-m.jpg)
Charles Martin
Malcolm Owen
William Gallagher
43 Comments
iPads with Wi-Fi seem far more cost effective especially with tethering abilities now available. I don't see iPads as a becoming major revenue stream for AT&T or Verizon other than via an iPhone's connection.
This is data as of 3/31/2011.
I would imagine people were waiting for the new iPad, and hence there were barely any activations in Jan or Feb. If this assumption is true, then 300,000+ activations in just a couple weeks -- given that there were Verizon 3G iPads and of course, wifi-only iPads -- is a very good number?
Back in January/Frebruary, was there anticipation of the iPad2 being available for purchase by March? I don't remember hints that Apple was going to have it ready before April or so, but perhaps there was more noise that I'd missed?
I suspect it's that most buyers don't see a sufficient benefit to a 3G model to justify the additional costs.
Tethering has killed the 3G requirement for eReaders, tablets, etc.
Overall, a solid quarter for AT&T despite the Verizon iPhone.
Well, I wanted a 32gb AT&T iPad, but by the time I got to the front of the line on the first day, all they had left was Verizon iPads, so I got one of those instead, with a promise from the Apple store that I could swap it out for an AT&T model when more became available. I still haven't been able to get one more than a month later, so I'm guessing it's less a question of low demand and more a question of low production numbers.