On the one hand, the iPhone has helped lure coveted subscribers from competitors such as Verizon Wireless, boosting AT&T's total wireless subscriber base. But on the other hand, the hefty subsidy that AT&T pays each time an iPhone is sold is eating into the company's profits.

The launch of the latest iPhone 3GS on June 19 was the biggest boost yet AT&T got from its iPhone deal. The company, which reported second quarter earnings on Thursday, said it activated more than 2.4 million iPhones during the quarter. Roughly a third of these activations were for new AT&T subscribers.

In total the company added 1.4 million net subscribers during the quarter, including 1.2 million customers with monthly post-paid plans. Analysts had expected the company to add about 1.08 million new subscribers, according to Reuters.

Despite the boost from iPhone sales, AT&T's profits dipped compared to last year. The company reported a profit of $3.2 billion, which is down from $3.77 billion during the same quarter a year ago. The company also reported that its revenue fell slightly to $30.73 billion from $30.87 billion. Analysts had expected revenue of about $30.64 billion, according to Reuters."

Labels: apple, att, iphone 3GS

¶ posted by Jimmie Geddes, Editor @ 7/23/2009 12:51:00 PM