CUPERTINO, Calif. (
) -- How huge was
(AAPL - Get Report)
? Just ask
(T - Get Report)
The scorching-hot iPhone accounted for all of Ma Bell's wireless postpaid subscriber growth in the first quarter. And
wireless growth carried an otherwise limping AT&T
The iPhone not only helped boost wireless data revenue by nearly $1 billion in the quarter, it salvaged what would have been a dismal subscriber performance among non-iPhone customers.
AT&T activated 2.7 million iPhones in the first quarter with about a third of those customers switching from another carrier to AT&T to get the phone. However, the company added a mere 512,000 postpaid or contract customers, below analysts' estimates. This was the second quarter in a row where non-iPhone users have marked a decline.
Is it time for Ma Bell to panic about a future without Apple iPhone exclusivity -- and with the prospects of a
? Not just yet. Consider these two developments:
The arrival of the redesigned mystery iPhone this summer.
The $100 price tag on the iPhone 3GS.
"It was a very strong quarter for AT&T," says Nielsen analyst Roger Entner, referring to the broad improvements in nearly every wireless category from margins -- up two percentage points to 44.5% -- to average sales per postpaid user, which jumped 4% to $61.89.
It's no secret that the iPhone has been a key to AT&T's wireless performance. One thing that stands out, says Entner, is that demand for the iPhone 3GS has not yet reached a plateau like the previous iPhone did two quarters after its introduction. "It goes up, and up and up," says Entner.
That pattern will likely continue when Apple and AT&T announce a new iPhone and cut the 3GS to $100 like they did last year with the 3G phone when the 3GS arrived.
"The precedent was established when they cut the price in half last year," says Entner.
At $100, the popular iPhone undercuts archrivals like
(GOOG - Get Report)
Android phones by half. Not a bad weapon in the
great smartphone challenge of 2010
AT&T's Apple iPhone exclusive may vanish next year, but for now it's making all the difference.
--Written by Scott Moritz in New York.
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