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AT&T Still Rolling in iPhone Dough: 1.9M iPhone's Activated in Q4

AT&T Mouth of Sauron Speaks!

AT&T reported on their own quarterly earnings today, the highlights according to Fortune (via MacRumors):

  • AT&T has activated 4.3 million iPhone 3Gs since its launch, 1.9 million in Q4 alone — more than double its iPhone activations one year earlier.
  • The average revenue from Phone users is 60% higher than the typical AT&T customer — thanks to that $30 per month data fee. Their heavy use of Web services helped drive AT&T wireless data use up 51.2% year to year, which as reader Jon in Brentwood, Calif., points out is not necessarily a good thing.
  • About 40% of the iPhone activations this quarter were new AT&T customers, either buying their first cellphone or switching from another carrier.
  • The churn rate — the percentage of customers who drop AT&T’s service — among iPhone owners is significantly lower than the rest of the network, sharply reducing marketing costs.

They also note that 1.9 million iPhone 3G's activated in its second quarter on the market is nearly double the 1 million BlackBerry Storm's activated by Verizon in it's debut quarter...

Have something to say about this story? Share your comments below! Need help with something else? Submit your question!

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, Vector, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

AT&T Still Rolling in iPhone Dough: 1.9M iPhone's Activated in Q4


More important to us aapl shareholders, att will pay aapl just short of $1 billion for the exclusive right to sell the iPhone this year.

So 1.14 million iphones were sold to users who were already on the network...how many of those are users who are upgrading from a 2g to 3g?
I would hope that the iphone outsold a completely brand new product that RIM put out. It had no following other than people 1. Crack addicts and 2. People who didnt want a lame phone on Verizon (which god...they have so many lol). The Storm is a completely new product, succeeding and failing in certain areas. You cannot deny that even with the negative attention it has done well.

In addition, Apple receives deferred revenue from ATT over the life of each end-users contract. This was something ATT wanted, because when the master contract was negotiated nobody knew how many walk-aways there would be if Apple could not keep the phone operational.
This money amounts to WAY more than the initial price of a phone paid by ATT to Apple. (This is why Apple will usually sell you a new phone at the subsidized price if yours is stolen. They make only 20 or 40 bucks on the subsidized price, but they maintain that ATT revenue stream.
This may also be why Apple is so fast and free with replacement phones at the Genius bar.
Far more obscure (at least as far as reported in the Apple 10Q is the warranty return rate and the cost there of. The massive numbers of Refurbs being shoveled out the doors of Bestbuy, ATT etc for $99 serve to mask warranty costs, by recovering at close to 60% of the cost on most warranty returns.
These refurbs allow ATT to go after the low end customer.