13 thoughts on “AT&T Beholden to Steve & the iPhone? Seems like!”

  1. I am sure their RIM selection helps also – but it would worry me a bit as a company to rely SO much on this one trick – particularly when a guy like Jobs is the horse trainer. But ride it while they can…..but make sure you remember what happened to Motorola…..

  2. So it is a negative thing that you sold twice as much as you did last quarter and gained market share while everyone else was tanking. Apple haters need to get over their second guessing. AT&T has done well by this deal and their new customers spend more and are less likely to switch. Get over Apple hatred. They ain’t going away.

  3. In Canada, Rogers’ latest quarter showed them with 65% of new activations as iPhones… about twice what AT&T has seen …

  4. I believe your math is wrong – the ARPU for an iPhone customer is something like $100, since you need to have the $30 data plan and be on at least a $59.99 calling plan. So the subsidy is for closer to 5-6 months at most.

    1. I believe there is one more item to consider in the iPhone ARPU number. The $59.59 ARPU includes the iPhone ARPU, so you have to exclude the iARPU contribute to get your true ARPU and then multiply by the 1.6.

  5. Actually to figure out how long the customer needs to stick around, you need to calculate the monthly profit (before selling costs), not monthly revenue, and divide that into the amount of the subsidy. The customer is only worth what they deliver to the bottom line. Quick and dirty shows a profit before selling costs of 46% for their wireless biz (2007 annual report). So 46% of $95.34 is $43.85, and dividing that into your total makes it more like 13+ months. This is probably generous as I took out G&A as well. So your point is even stronger!

  6. Definitely true that iPhone is playing a big part in AT&T’s growth. (See latest article at blog.changewave.com for survey data leading to that conclusion.) However, even without iPhone, AT&T added 1.14m new subscribers in the quarter, which is just a tad less than Verizon Wireless.

    To those who commented:
    – The $450m charge is specifically related to iPhone subsidies.
    – The basic plan for iPhone (single-user) is 39.99, not 59.99. But the use of AT&T’s ARPU figure is better.

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