AT&T Gets a Bushel of Apple Bruising - TheStreet

Updated from Wednesday, Jan. 6

DALLAS (

TheStreet

) -- Less than a week in, and

AT&T

(T) - Get Report

is already off to a rough start this year.

The house that

Apple

(AAPL) - Get Report

built is starting to have trouble filling seats. And with the iPhone -- AT&T's marquee draw -- headed to another franchise, Ma Bell missed a chance to help fill a big spot on the roster.

Here's a quick breakdown on AT&T for the year to date.

  • On Tuesday, Google (GOOG) - Get Reportunveiled its own phone and named T-Mobile (DT) - Get Report, Verizon (VZ) - Get Report and Vodafone (VOD) - Get Report as partners. The glaring omission: AT&T, which won't be getting the Nexus One anytime soon, if ever.
  • The recent, brutal "coverage-map" attack ads by Verizon have forced AT&T to respond with new ads. On Tuesday, the company vowed to change its network upgrade strategy. In short, AT&T must spend more money.
  • As the company's earnings report later this month will show, Apple iPhone sales cooled off dramatically in the fourth quarter.

But the news for AT&T isn't all bad. On the plus side,

Amazon

(AMZN) - Get Report

Kindle sales went gangbusters at Christmas. AT&T benefits as the data service partner to Kindle, having somehow underbid

Sprint

(S) - Get Report

for the contract.

After a robust third quarter, AT&T's wireless subscriber growth has slowed considerably. Macquarie analyst Phil Cusick estimates that postpaid net new subscribers grew by 1 million in the fourth quarter, down from the 1.4 million in the prior quarter when the iPhone 3GS debuted.

The cool down is iPhone related, says Cusick.

"We expect iPhone sales of 2.75 million units at AT&T versus the 3.2 million in the third quarter," Cusick writes in his research note Tuesday.

This week may be just the first of a number of bitter weeks ahead as Ma Bell tries to adjust to a lot less Apple sweetness in its future.

Shares of AT&T closed Wednesday down 41 cents, or 1.46%, at $27.61.

-- Written by Scott Moritz in New York

Now See

>>Photo Gallery: 2010 CES Show

>>CES 2010 coverage