AT&T Q2 Financials: Sold 2.4 Million iPhones… but Had to Pay for Them Upfront
Apple’s exclusive US iPhone carrier, AT&T has announced their Q2 2009 financials, and when it comes to the iPhone, more is… well, more.
- 2.4 million iPhones activated during the quarter
- (Apple sold 5.2 million, so that obviously doesn’t include international or as-yet unactivated iPhones).
- 1.4 million new customers.
- 3.4 billion (with a b!) in data revenue.
The downside? AT&T had to swallow those iPhone subsidies up front, leading in part to a 15% fall year over year:
“Increased operating expenses in the second quarter of 2009, in part, reflect volume-based acquisition costs associated with the success of the iPhone 3GS launch, which started June 19. AT&T’s iPhone customer characteristics are attractive, with (average revenue per user) significantly higher than and churn rates well below the company’s postpaid averages; as a result, robust iPhone demand drives strong recurring revenues and substantial long-term value. AT&T iPhone subscribers, both new customers and upgrades, take two-year contracts with data packages. As a result, robust iPhone demand drives strong recurring revenues and substantial long-term value.”
Translation: It cost them a few hundred bucks per user now, but those users are giving them back a hundred bucks a month for the next 24 months. Do. The. Math.
The big picture remains, however, that AT&T needs the iPhone to keep customers, get new customers, and earn big money off those high value customers.
[via Apple Insider]
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And yet no mms and no 3g
What are you talking about, no 3G?
I think Mark meant either 3.5 g networks or tethering lol.
How long can they keep doing this?
Wow! Apple forced AT&T to buy all those phones upfront? Apple really has them by the balls. I wish I could force my customers to do that.
I think MMS on AT&T is a myth, like Bigfoot, or the Yetti.
I belive mms will be released on 8/22/09…
at the risk of sounding like “that guy”.. I had att/cingular before the iphone, and if for some reason they lose the iphone, I’ll still have them after. I love my iphone, but I, unlike many others, am glad that the iphone is on att and not another network, cause its the wireless company I prefer. To the no mms comment.. Its seems like people make att the bad guy for this.. if your memory serves you.. the first and second iphones, didn’t have mms.. att had to create coding just for the iphone, then.. when apple says they can now have it.. att has to make the adjustments.. not apple. If the first iphone would have had mms, it would have had it on att day one.. this is more apples fault then it is atts.
It seems a bit odd to me that AT&T has gone to great lengths to block people from using MMS on the iPhone since the launch of 3.0. I know there were alot of hacks out there that had you switch to another phone, then back to the iphone etc to enable MMS, but AT&T worked hard to detect this and block it. I mean, how many resources could they have applied towards getting MMS ready for wide use instead of trying to keep people from doing something that they will give for free in a few months anyway. My guess is that less than 5 percent of iPhone users would have attempted this hack in the first place, so don’t give me the argument that it would cripple their network.
“Wow! Apple forced AT&T to buy all those phones upfront?”
The title is somewhat misleading – as at least Joe McG’s post shows.
Presumably Rene means they have to absorb the subsidy costs and pay for the phones before they recoup the profits from the contract. They isn’t really what ‘had to pay upfront’ means in business. That phrase is used to indicate a company has to pay for product first in order to take delivery. That isn’t what happened here.
@Joe McG
The first iphone came out in 2007, 3.0 came out in 2009.. it took apple two years to release mms, it will take att 2 months. Also, different departments work on different things.. not every single att resource is working on getting mms fixed.. they have a business to run also. So just because one group found a problem and tried to deter it, doesn’t mean the other group isn’t still hard at work getting mms to us.
@d.allen, what you say is true but MMS has been on the roadmap well before the launch. We all knew that MMS was coming since February or March during the 3.0 Roadmap dog and pony show. Even if that was the first time that AT&T knew about the iPhone with MMS they still had more than 2 months to ramp plan and fortify their network for the additional MMS volumes from iPhone users. It looks like the time to upgrade is more like 5-6 months than 2.
@d.allen- presumably every other iPhone carrier had to do the same thing (disable MMS for earlier iPhones and re-enable it for iPhone 3.0), yet none of the other carriers around the world seemed to have a problem with it. And it’s not like they didn’t have at least 3 months notice (probably much more than that given their close partnership with Apple in the U.S.), so I don’t know what AT&T’s damage is but with the amount they’re charging for minutes, text and mandatory data plans, it is frankly inexcusable.
@Dyvim
I understand where you are coming from.. I would like mms aswell.. although I’ll probably use it twice, and then forget about it.. but I don’t know the size of all those companies, maybe att is a much larger scale, it certainly seems so by the sales figure.. and obviously they made a mistake by the way they did coding previously, which is creating this problem.. I’m not going to act like they don’t have to assume some fault.. but to get the whole fault, is quite different. Apple created a phone that was supposed to be ahead of the market.. but something as simple as mms took them two years.. I can’t complain about it taking att two additional months to get it set up.
No 3g on Asheville nc is what I ment. I have edge and that even sucks.
You’ve waited 2 years, what’s 3-4 more months.
http://reviews.cnet.com/8301-19512_7-10294088-233.html
AT&T told me they fixed their voice mail problem. That’s a step in the right direction. Their 3G network seems to be stabilizing a bit (only a bit) in my neighborhood. It’s still someone puzzling why it takes so long to get the carrier network congruent with the handset, though. So, my $.02 is that AT&T is the weaker link in the offering, but maybe they don’t deserve vilification, if they ultimately deliver on time.
“somewhat puzzling”, not “someone puzzling”. can’t type today
:]