The exclusive U.S. service provider for iPhone said its costs to sell the newly announced iPhone 3G S would be similar to those for the original 3G iPhone, which pressured its profits last year.
But unlike when it announced the first 3G iPhone last year, AT&T said it was sticking by its target for wireless margins in the low 40 percent range based on operating income before depreciation and amortization.
On June 19 AT&T said it will sell the new iPhone 3G S for $199 for versions with 16 gigabytes of storage space, and $299 for a 32-gigabyte model for customers who commit to a 2-year service plan.
The new iPhone 3G S will allow Web surfing at twice the speed of today's iPhone and have a 3 megapixel camera that can record video, according to Apple.
AT&T shares fell 10 cents to $24.46 on New York Stock Exchange shortly before the close of trading.
(Reporting by Sinead Carew; Editing by Richard Chang)