AT&T profits down, but the iPhone is bright spot

April 22, 2009

AT&T profits down, but the iPhone is bright spotEven though AT&T profits were down markedly in the first quarter, their wireless business was up significantly over that same period, mainly due to the iPhone 3G.

AT&T announced their numbers for the first quarter, and their profits, were down as expected. In fact they were down 9 percent, which is a huge number when applied to revenues as gigantic as those enjoyed by AT&T. Not even a behemoth such as they are safe, though, from the negative pressures applied by a world economy in recession.

Still, there is a bright spot in the negative numbers. It is provided by the wireless division, and is mainly due to strong sales of the iPhone 3G. As it turns out, the Dallas-based telephone giant activated 1.6 million iPhones during the first quarter of this year, according to an Apple Insider story. The iPhone was the driving force behind a wireless division whose revenue grew 40 percent over the first three months of 2009.

AT&T CEO Randall Stephenson had this to say: “I am particularly pleased with the success of our iPhone 3G initiative, which has driven strong high-end customer growth and delivered financial benefits ahead of our original outlook. Business and consumer expectations for mobility are on the rise, wireless innovation is flourishing and the opportunities ahead are substantial.”

It is no wonder that AT&T is pushing hard to keep its stranglehold on providing wireless service for the iPhone: for them, the iPhone is where the money is. It is also where the growth is. It seems, so far, that Apple is willing to let AT&T retain a monopoly on service for the iPhone in its biggest market, the U.S., even though it is fairly clear that Verizon has a better network in place. In fairness, it must be noted that AT&T is building out their network, so that the coverage disparity may fade. We can all hope that is the case.

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