AT&T, which was the first carrier to support the iPhone when it launched in 2007, has activated one million iPhone 4S smartphones, making it the most successful Apple iPhone launch in the company's history.
It's no surprise that customers are clamoring for the iPhone 4S and they want it to run on a network that lets them download twice as fast as competitors', said Ralph de la Vega, president and CEO of AT&T Mobility & Consumer Markets.
The iPhone 4S is also available on Verizon Wireless, Sprint and C Spire networks, but AT&T is the only U.S. carrier to support the phone's 4G-type speeds. C Spire has yet to take pre-orders and Verizon has not released its figures yet, but Sprint reported its best ever day of sales when it started selling the iPhone 4 and 4S on Oct. 14.
This is a country that, for all purposes, is 100 percent saturated with wireless customers, said Rick Franklin, an analyst at Edward Jones. Given that there is any growth at all with AT&T is an amazing feat.
AT&T had a relatively slow third quarter compared to recent years. In the quarter ended on Sept. 20, AT&T activated 2.7 million iPhones, the lowest figure reported in the past 18 months. The Dallas-based company also added 319,000 wireless customers, less than half the number of customers added in the same period last year.
Similarly, AT&T's $3.6 billion profit in the latest quarter is only a fraction of the $12.3 billion made last year.
It was slow because we didn't have an iPhone launch like we did a year ago, de la Vega said.
Indeed, in each year since the iPhone's debut in 2007, Apple has traditionally chosen June or July to release new models of the iPhone. The iPhone, iPhone 3GS, and iPhone 4 were released in June; the iPhone 3G was released in July. The iPhone 4S was the only model to be unveiled and released in October.
We expect blockbuster sales in the fourth quarter, de la Vega said. We are very confident it will pick up.
De la Vega expects unbelievable results from holiday sales, new LTE devices, and the iPhone 3GS, which is now free with a two-year contract. AT&T is the only carrier supporting the iPhone 3GS.
The company will also reap some revenue from Android, which has seen sales double since last year. AT&T says Android and non-iPhone devices have doubled year-over-year, making up about half of the 4.8 million devices sold by the company.
Meanwhile, AT&T is still in the process of acquiring T-Mobile USA, but the U.S. Department of Justice is seeking to bar the $39 billion deal. Trial is scheduled to begin on Feb. 13.