Now that AT&T and Apple are tied at hip with the iPhone, Apple watchers look to AT&T for details on the health of iPhone sales. This morning, AT&T announced a decent first quarter, with profits up 22 percent, driven by gains in its wireless business. The jewel of that business is the iPhone, which commands nearly double the average monthly revenue per subscriber that AT&T gets from other wireless customers, and is helping to reduce its churn rate. Yet during AT&T’s earnings call this morning, Apple’s shares slumped nearly 4 percent in morning trading after rising over the past two trading days.
Investors were hoping for some indication that AT&T blew the doors off its iPhone sales, and some assurance that Apple would hit its goal of selling 10 million iPhones by the end of the year. Anything over one million new iPhone subscribers would have been well received. It doesn’t look like Apple delivered anywhere near that number, since AT&T added 1.3 million net new subscribers across all phones. (It added 5 million gross new subscribers before accounting for churn).
AT&T didn’t break out the numbers of iPhone additions as it has in the past. (When iPhone sales beat expectations, they are not shy about sharing it). By the end of last year, AT&T had activated two million iPhones. But during today’s call, here are the iPhone details AT&T provided (per Silicon Alley Insider):
iPhone continues to be very popular with customers, feedback is very good. ARPUs are in the mid to upper 90s across the base. We continue to see customers adopting iPhone. Over 40% are new to us. Nothing really new in trends there. Continued, solid growth. Through Q1 stable.
We’ll have to wait for Apple’s earnings tomorrow to find out how many new iPhones were sold in the quarter. The number could still be around 1.5 million because other carriers besides AT&T are selling it internationally, and about 30 percent are unlocked. But AT&T still makes up the vast majority of iPhone sales and usage. The big bump in iPhone sales, especially in Europe, won’t come until the 3G version comes out this summer.
But handing over the keys to its network to Steve Jobs was the smartest thing AT&T ever did. That mid-$90 average revenue per user (ARPU) compares to about $50 for all phones. Higher ARPUs and lower churn is what drives profits in the mobile business.
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I’m sure that has nothing to do with it.
Apple shares slump due to this alone? Look at the price of oil!
you have to wonder if Apple would of made more money from selling it like an ipod? Surely they would of sold 4 times the amount and all the phone providers would have been pushing them out for free.
Yo Erick, why don’t you fellas create a finance.techcrunch.com page and discuss all tech related stocks…..?
I think Apple should have offered a universal iphone without being tied to 1 carrier. They would have sold far more. I was interested in one but after learning my monthly service fee would be double what I’m paying…well they can kiss my a$$.
Oh cmon, we have better things for Apple coming up soon. Don’t we Steve?
Speaking of Apple: anybody notice that Apple.com is offline right now? Like “Http/1.1 Service Unavailable” down, not the “We’ll be back soon” down.
There’s no way in hell I’m spending $100+ per month for cell phone bill. ATT is out of their mind.
serves them right to tieing into one of the worst mobile carriers in the states.
i’m glad the public held back as much as it did from signing a 2 year contract with that beats of a company. maybe it will open the eyes of Apple some.
You’re leaving out the unlocked numbers and the huge business people are doing bringing iPhones into Russia- estimated at hundreds of thousands.
Apple bottomed out at noon and on the way back up.. 22% is nothing to turn your nose up at. AT&T is lucky to have them on board.
I have an iPhone and my monthly bill is only $65 with unlimited data plan. Not sure where you got the $100 number - is this a family plan or what?
Sheesh, they were up eight bucks yesterday
So, last week Apple went from $140 to $165 and you said nothing.
Now it levels a bit and you create such a bad press.
You Erick, are a disgrace for journalism and should be fired and fed to dingos.
Btw, M$ is also going down, you have anything to say about that????
Dudes. WTF cares abotu ATT’s numbers!? Wait till you see AAPL blow away earnings tomorrow and the stock will go up past 170 on its way to 200+ by January’s Moscone show. 3G Iphone in June and Mac Airs they can’t keep on the shelves. I’ve been byiing/selling from 128 up and got more at 159 today! These pull backs are nothing but opportunity to buy. If it drops more, I’ll buy more.
So whar of AT&T’s numbers? What about jailbroken iPhones? With those, you can use a different provider.
Lack of news?. Is this article counted in the Top Bloggers ranking?
I think you’re seriously misreading the numbers here. From your own summary, AT&T had 5 million new subscribers. Churn doesn’t matter if you’re just looking at iPhone sales. So, only 20% of new subscribers had to be iPhone subscribers to hit the 1 million mark.
But it gets better. Later in your summary AT&T says “40% are new to us”. So, 60% of their new iPhone users are existing customers and wouldn’t be in the new subscriber counts. That means less than 10% of AT&T’s new subscribers had to be iPhone subscribers to hit the 1 million mark.
Sure seems reasonable to me.
I must disagree with “handing the keys to Steve Jobs” thing. I think it is a very bad move for ATT. While it is great for the telco world (people pushing the ARPU higher), it underscores the fact that these customers are not really ATT customers. They are apple’s. So it repositions ATT as “iPhone pipe”. The problem is that there can be other pipes as soon as the exclusivity is over. As soon as there are enough knockoffs (can you spell Samsung) it is going to be back to competition on devices. this is where ATT will lose their shirt - exactly because they *are* iphone.
Hi,
I made some interesting observations about this post on my blog.
Many Thanks,
164.00 Already fellas - did you buy at 158 like I did???
I think AT&T numbers won’t affect Apple (unofficially). Thats because there are probably equal number of unlocked iPhones going around on T-Mobile, Sprint, Verizon, Rogers, Telus and the likes.
I am from Canada and four of my buddies at work have iPhones….all with Canadian service providers…
I think Apple is selling tonnes of iPhones and would definitely be close enough even if they don’t meet the 10 million phones target by the end of the year.