Earlier this week, Apple posted its most profitable quarter ever.
While we knew this would greatly impact AT&T's earnings as well, we did not expect their revenues to be so heavily reliant on just the iPhone.
In the three months ending September, 4.3 million new connections were activated by AT&T. Of this 74% – 3.2 million connections were just iPhones! Of these 3.2 million iPhones, close to 40% were new customers confirming what all of us had guessed for a long time – AT&T would be close to dead without the iPhone.
On the revenue front, the total revenues for the quarter equalled $30.9 billion, down from $31.3 billion in Q3 2008. This meant a net income of $3.2 billion that remained unchanged from last year. The diluted EPS fell from $0.55 in the third quarter of last year to $0.54 this year. The revenues from wireless segment increased 8.2% in this period.
With close to 92% of the post paid subscriber growth coming only from the sale of iPhones, AT&T has a lot of strategizing to do for the oncoming year. With speculations rife about the Apple-AT&T exclusive deal coming to an end by 2010, the number two wireless carrier in the US could have its work cut out should Apple decide to end its exclusivity with AT&T. That seems very likely considering that Apple has only recently ended carrier exclusivity in two other big iPhone markets – Canada and UK.
In fact according to Macworld, AT&T Mobility CEO Ralph de la Vega hinted that they might lose the exclusive deal to sell Apple's iPhone during the conference call with analysts. He said:
“We have a legacy of having a great portfolio…that will continue after the iPhone is no longer exclusive to us. We think we will continue after the iPhone…to drive [results]…."
He went on to add:
“Even if we lose exclusivity [of the iPhone], we will be the only carrier with HSPA 7.2 [a network specification being deployed at AT&T] and [new devices] will work on our network faster,” de la Vega said. “I feel as strongly as ever [about] the capability of devices in our lineup and [am] super-excited about the deals with e-readers and personal navigation devices."
How do you see AT&T's results coming on the back of such a heavy iPhone influence? Could this reduce their negotiating power in future revenue-sharing discussions with Apple? Do you think it would impact AT&T's revenues if Apple added new iPhone carriers? Please tell us your opinion in the comments.
You may read the entire AT&T earnings report here[via Gizmodo]