iPhone 3G Sales Spur AT&T Wireless Growth in Q4 2008
While iPhone activations result in an up-front hit to AT&T's earnings due to the subsidy provided to Apple, AT&T values new iPhone customers for their extended contracts at a higher average monthly rate than typical wireless subscribers. AT&T also reported that 40% of iPhone activations were to customers who were new to AT&T, a figure consistent with previous results.
Fortune analyzes how the iPhone has helped drive AT&T's wireless growth:
1. 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.
2. 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.
3. About 40% of the iPhone activations this quarter were new AT&T customers, either buying their first cellphone or switching from another carrier.
4. 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.
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So...that is where a good chunk of our $30 monthly fee goes....right to Apple.
NEW YORK (Reuters) — AT&T (T), the top U.S. phone company, said fourth-quarter profit fell despite higher wireless sales as it paid high subsidies to support Apple's popular iPhone.
So...that is where a good chunk of our $30 monthly fee goes....right to Apple.
Even if that were true, what would be wrong with that?
In any case, the subsidies being referred to are the subsidies on the hardware being initially purchased, hence why the article mentions the up-front hit to AT&T's earnings to pay the subsidies. That doesn't mean that Apple gets cuts of the monthly fees - that would be silly.
Of course. If one leaves AT&T, you are left with a useless phone. One cannot legally leave AT&T for another mobile phone carrier.
AT&T should include text messaging in their monthly fees. Ugh:mad:
{yes, am aware of jail breaking the phone but I'm just bugged at AT&T's iphone fees}
Better news would be that ATT is not doing so well with the iPhone, then maybe we would see a new carrier pick it up sooner.
Yeah, that makes sense - the first exclusive carrier doesn't do well with the iPhone, so other carriers will just be jumping on for a slice of the limited pie, right? Come on, think before you say stuff like this. If anything, you want the iPhone to be a success so that other carriers will have an interest in bringing it to their network once the exclusivity contract is up.
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