AT&T Inc set a disappointing profit target after adding fewer wireless subscribers than expected in the fourth quarter, hinting at the troubles it may face once Verizon Wireless starts selling Apple Inc's iPhone.

The operator's shares fell almost 3 percent as investors fretted about its growth prospects once market leader Verizon Wireless launches an iPhone next month, ending AT&T's more than three years of exclusive rights to the popular device.

The company, which has depended heavily on iPhone for growth, forecast 2011 earnings per share growth in the mid-single-digit percentage range, compared with Wall Street expectations for 10 percent, analysts said.

Avian Securities analyst Gerard Hallaren said the guidance reflected the loss of exclusivity, which he sees as a slow bleed on AT&T not a flip of the switch.

I suspect they're coming to grips with the reality of the iPhone exclusivity wearing off, he said.

Investors, who already had low expectations for AT&T's subscriber additions in 2011, were worried about how much customer growth AT&T had baked into the profit estimate, said another analyst, Christopher Larsen from Piper Jaffray.

Adding to negative sentiment, AT&T's additions of 400,000 net contract customers in the fourth quarter compared poorly with the average expectation for almost 504,000 from eight analysts contacted by Reuters.

AT&T's figure was also less than half the 872,000 new contract customers reported by Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.

These results coming on the heals of Verizon's really demonstrate Verizon's leadership position in the (contract customer) segment, Mizuho analyst Michael Nelson said..

AT&T's wireless profit margin was thinner than expected, too. The margin remained at 37.6 percent, in line with the third quarter, counter to AT&T's promise for an improvement.

But AT&T noted that that it still managed to activate 4.1 million iPhones in the quarter, despite widespread consumer anticipation of the Verizon Wireless iPhone's arrival.

Piper Jaffray's Larsen also found some positive news in AT&T's addition of 442,000 customers using tablet computers, including Apple's iPad. AT&T also cited sales of tablets based on Google Inc's popular Android software.

That's one of the things they're doing, Larsen said. They're not just about iPhones. They're selling a lot of other devices.

AT&T, the No. 2 U.S. mobile operator, reported a profit of $1.09 billion, or 18 cents per share for the fourth quarter, compared with a profit of $2.7 billion, or 46 cents per share in the same quarter the year before.

Excluding unusual items, AT&T earned 55 cents per share compared with the average analyst estimate for 54 cents a share, according to Thomson Reuters I/B/E/S.

Operating revenue rose 2.1 percent to $31.36 billion. On average analysts were expecting revenue of $31.47 billion, according to a poll from Thomson Reuters I/B/E/S.

AT&T said it expects consolidated revenue to grow this year but did not give a specific target.

It said earnings per share growth would be boosted by improvements in both wireless and wireline profit margins.

It said capital spending for the year would be in the low-to-mid $19 billion range and wireless spending increases would be offset by lower wireline capital expenses.

AT&T shares fell 81 cents or 2.8 percent to $27.92 in morning trading on the New York Stock Exchange.

(Reporting by Sinead Carew; editing by Derek Caney, Dave