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AT&T iPhone activations up 33%, unaffected by Verizon, but 3G tablets prove weak

post #1 of 44
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AT&T reported its quarterly earnings on Wednesday, revealing that it activated 3.6 million iPhones in the first quarter of 2011, a 33 percent increase from a year prior. Tablet activations, however, were much lower, at just 322,000.

iPhone activations increased by a million in the first quarter of 2011, with 23 percent of those subscribers new to AT&T. iPhone subscriber churn, or customer turnover, was unchanged from a year ago.

The numbers suggest that the immediate impact of the Verizon iPhone launch during the quarter was not as great as some had predicted. AT&T has long been maligned for the performance of its network, particularly by iPhone owners.

Though Verizon has a larger 3G network footprint and its customers experience fewer dropped calls, it also has a 3G network that is much slower than AT&T. In addition, Verizon's CDMA network does not allow simultaneous voice and data connections, while AT&T's does.

Though iPhone sales at AT&T were strong, sales of 3G-capable tablets, including the iPad, disappointed. AT&T reported that only 322,000 new tablet subscribers were added in the quarter, with more than 80 percent of those booked to the prepaid category.

Considering the strong debut for the iPad 2 during the quarter, the numbers would suggest that the 3G-capable iPad is not a popular option for consumers. Apple and its carrier partners sell different iPad models with integrated 3G radios for the AT&T and Verizon networks.

AT&T added 62,000 customers in the quarter, which beat analyst expectations. According to analysts polled by Reuters, Wall Street watchers expected AT&T to report a net loss of 83,000 customers following the launch of the Verizon iPhone.

Still, Apple's new partnership with Verizon clearly had a impact, as AT&T's new activations were significantly reduced from 400,000 in the previous quarter. Verizon will report its own earnings on Thursday, while Apple is set to reveal its earnings this evening in a conference call at 5 p.m. Eastern.

AT&T's earnings increased to $3.4 billion, or 57 cents per share. Revenue was up 2.3 percent to $31.25 billion.

"We delivered another robust mobile broadband growth quarter for a very solid start to the year," said Randall Stephenson, AT&T chairman and chief executive officer. "We posted double-digit wireless revenue growth, and we set new first-quarter records in total net adds, connected device net adds and smartphone sales. Growth in tablets and other branded computing subscribers also continues to be strong."
post #2 of 44
iPads with Wi-Fi seem far more cost effective especially with tethering abilities now available. I don't see iPads as a becoming major revenue stream for AT&T or Verizon other than via an iPhone's connection.
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post #3 of 44
This is data as of 3/31/2011.

I would imagine people were waiting for the new iPad, and hence there were barely any activations in Jan or Feb. If this assumption is true, then 300,000+ activations in just a couple weeks -- given that there were Verizon 3G iPads and of course, wifi-only iPads -- is a very good number?
post #4 of 44
Back in January/Frebruary, was there anticipation of the iPad2 being available for purchase by March? I don't remember hints that Apple was going to have it ready before April or so, but perhaps there was more noise that I'd missed?

I suspect it's that most buyers don't see a sufficient benefit to a 3G model to justify the additional costs.
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post #5 of 44
Tethering has killed the 3G requirement for eReaders, tablets, etc.

Overall, a solid quarter for AT&T despite the Verizon iPhone.
post #6 of 44
Well, I wanted a 32gb AT&T iPad, but by the time I got to the front of the line on the first day, all they had left was Verizon iPads, so I got one of those instead, with a promise from the Apple store that I could swap it out for an AT&T model when more became available. I still haven't been able to get one more than a month later, so I'm guessing it's less a question of low demand and more a question of low production numbers.
post #7 of 44
The iPad number is different than the iPhone number in the sense that every iPhone purchased is activated, but every 3G iPad that is purchased is not necessarily activated. The iPad isn't subsidized and there is no contract. I think people get the 3G iPad as an insurance policy, in case they find themselves in a situation where they need it. So they might not activate it right away, or ever.
post #8 of 44
Quote:
Originally Posted by anantksundaram View Post

This is data as of 3/31/2011.

I would imagine people were waiting for the new iPad, and hence there were barely any activations in Jan or Feb. If this assumption is true, then 300,000+ activations in just a couple weeks -- given that there were Verizon 3G iPads and of course, wifi-only iPads -- is a very good number?

MotoMobile would kill for 300,000 Xoom sales... not just in a quarter either...
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post #9 of 44
Quote:
Though iPhone sales at AT&T were strong, sales of 3G-capable tablets, including the iPad, disappointed. AT&T reported that only 322,000 new tablet subscribers were added in the quarter, with more than 80 percent of those booked to the prepaid category.

Maybe all the wannabe tablet makers should take note, apparently most people are not waiting for a tablet with a 3G data plan, so selling them on a 2 year contract is, politely saying, not the best of ideas (who'd have thunk that)
post #10 of 44
Quote:
Originally Posted by island hermit View Post

MotoMobile would kill for 300,000 Xoom sales... not just in a quarter either...

Actually it's much higher than 300,000 for Apple. A lot more AT&T 3G iPads were being bought and then resold to China/India.
post #11 of 44
This definitely means less than 2 million iPads sold for the quarter. Bad news for the stock. Although it sounds like iPhone sales might help as they seem to be doing well.
post #12 of 44
Quote:
Originally Posted by noexpectations View Post

Tethering has killed the 3G requirement for eReaders, tablets, etc.

Overall, a solid quarter for AT&T despite the Verizon iPhone.

A lot of 3G iPad2s also left the U.S. without being activated. *cough* *cough*
post #13 of 44
Quote:
Originally Posted by noexpectations View Post

Tethering has killed the 3G requirement for eReaders, tablets, etc.

Overall, a solid quarter for AT&T despite the Verizon iPhone.

So the mass exodus to Verizon hasn't happened yet, eh? From reading posts on this and other forums you would have to conclude that at&t is Satan incarnate. Why can't people realize that just because you read it on the internet doesn't make it true. Negatives are amplified way out of proporation because complainers complain the loudest and those who are satisifed rarely utter a peep. It's also why so-called "user reviews" of a product are completely useless as a tool in making decisions.

The most famous example of this situation is "antennagate". When antennagate first broke the demise of Apple was assured according to every blog and forum on the planet. Well, we all know how that turned out don't we, Ireland not withstanding.
post #14 of 44
Quote:
Originally Posted by markb View Post

This definitely means less than 2 million iPads sold for the quarter. Bad news for the stock. Although it sounds like iPhone sales might help as they seem to be doing well.

What are you smoking? How did you come up with this nonsense number of 2 million? As other have pointed out the WiFi only iPads seem to be the most popular. Jeeezzus...
post #15 of 44
They added 62 thousand new customers and activated 1 million new iphones. the iphone is still doing fine.
post #16 of 44
Where I live, AT&T took over an alltel and we have no option for verizon. the at&T service sucks here too. But a lot of people wanted an iPhone also. Stuff like this I'm sure contributes to the new activations for at&t and makes them look good when in fact, it's because there's no options for people like the 50,000+ that live around here.
post #17 of 44
So the analysts were only off by 145,000 subscribers - maybe I should get a job like that.

Or better yet - a job with BP - since they just paid out something like a million dollars in bonuses for last year because statistically is was their best year yet for safety - apparently since they only counted the Deepwater Horizon's 11 deaths and millions of gallons spilled oil as a single incident.
post #18 of 44
I would suggest being cautious about drawing conclusions where AT&T iPads are concerned. First, since there's no contract, new users may not feel compelled to sign up immediately. Secondly, and perhaps more importantly, AT&T iPads are still in short supply because so many of them are being bought up and shipped overseas where their sim cards can be swapped out.

Here in New York City, there are still groups of people at all the Apple stores (apparently recent Chinese immigrants in most cases) who are lining up overnight every night in order to buy any AT&T 3G models as soon as shipments arrive. As a result, legitimate domestic consumers are finding it very hard to buy them in person and are forced to resort to the online store, where there's still a significant wait. I imagine similar things are going on elsewhere, with some of the tablets being sold on eBay.

Although I'm aware that AT&T's network isn't perfect, I want an iPad with a sim card myself, so I'll be able to get 3G access when traveling abroad. For some of us, that's a compelling reason to skip the Verizon option. So I suspect that both Apple and AT&T will ultimately do fine where the iPad 2 for the AT&T system is concerned.
post #19 of 44
Quote:
Originally Posted by markb View Post

This definitely means less than 2 million iPads sold for the quarter. Bad news for the stock. Although it sounds like iPhone sales might help as they seem to be doing well.

Definitely not "definitely"!

It could simply mean, many iPad users did not sign up for service yet. The iPad does not require a service plan, therefor carrier numbers are not indicative of actual sales numbers.
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post #20 of 44
Quote:
Originally Posted by Blastdoor View Post

The iPad number is different than the iPhone number in the sense that every iPhone purchased is activated, but every 3G iPad that is purchased is not necessarily activated. The iPad isn't subsidized and there is no contract. I think people get the 3G iPad as an insurance policy, in case they find themselves in a situation where they need it. So they might not activate it right away, or ever.

Thank you. Exactly. In addition, AT&T's figure only includes activations still in use at end of the quarter, not all tablets activated for any given month during the quarter. So, you have some that don't activate, some that activate and then cancel, and some that activate for a month every so often. There's a ton a noise in that number to infer any thing about actual iPad sales.
post #21 of 44
Quote:
Originally Posted by AppleInsider View Post

AT&T reported its quarterly earnings on Wednesday, revealing that...Tablet activations, however, were much lower, at just 322,000.

Does this data take into consideration that many who buy 3G iPads don't actually activate them until needed? Wonder what that percentage is?
post #22 of 44
It is inaccurate to say that AT&T was unaffected by the Verizon iPhone launch. Sure growth at AT&T was 33%, but the real question is what would it have been if Verizon hadn't launched the iPhone? 40%? 50%? Thats the impact, the difference between 33% and what it would have been.

Also, retention offers at AT&T were greatly enhanced in order to achieve the stable iPhone churn, so indeed there was an impact.
post #23 of 44
Quote:
Originally Posted by TNSF View Post

It is inaccurate to say that AT&T was unaffected by the Verizon iPhone launch. Sure growth at AT&T was 33%, but the real question is what would it have been if Verizon hadn't launched the iPhone? 40%? 50%? Thats the impact, the difference between 33% and what it would have been.

Also, retention offers at AT&T were greatly enhanced in order to achieve the stable iPhone churn, so indeed there was an impact.

Of course, no way of knowing. Would surely have been higher, but I think they are happy with 33% growth. Many thought they would take a huge hit.
post #24 of 44
Quote:
Originally Posted by markb View Post

This definitely means less than 2 million iPads sold for the quarter. Bad news for the stock. Although it sounds like iPhone sales might help as they seem to be doing well.

Not necessarily. People get a 3g connection for when they aren't in a wifi spot. Don't assume because someone bough a 3g ipad that they intend to use the 3g on the ipad when the wireless works just fine with tethering to your iphone wirelessly.
post #25 of 44
Quote:
Originally Posted by swtchdtomak View Post

A lot of 3G iPad2s also left the U.S. without being activated. *cough* *cough*

My thinking exactly. I would expect activations to go way up next quarter. The gray market is the reason that whenever stores get the iPad 2 in stock, the Verison iPad is the only version that is left after the first hour.
post #26 of 44
I've put off buying a 3G iPad2 because I want to find out which network I should get it on... this increased choice is causing me some heartburn:

1) AT&T 3G
HSPA+ so the iPad2 is usable and resellable overseas.
Lower pricing tier ($15) but lower data cap (250MB)
Faster data
OK coverage

2) Verizon 3G
Higher monthly pricing
Better (1GB) lower tier
slower data
Better coverage

3) Wifi only
Cheaper
Already have a wifi only ipad
Will hotspots become more prevalent?


As you can see, I'm in a bit of analysis paralysis here with the 18 different iPad2 options (including size and color)!

And I thought they were crazy to debut with 6 options last year for iPad1!
post #27 of 44
Quote:
Originally Posted by digitalclips View Post

iPads with Wi-Fi seem far more cost effective especially with tethering abilities now available. I don't see iPads as a becoming major revenue stream for AT&T or Verizon other than via an iPhone's connection.

And ^^^that^^^ is why Ad-Droid can't seem to get it's foot into the door with tablets. They have to compete on price this time. Bogo's 'verboten".
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post #28 of 44
ATT is not seeing many activations, but all GSM iPads had certainly sold out. Meaning that many GSM versions had left the country. Nobody cares about CDMA outside of US.
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post #29 of 44
Quote:
Originally Posted by ThePixelDoc View Post

And ^^^that^^^ is why Ad-Droid can't seem to get it's foot into the door with tablets. They have to compete on price this time. Bogo's 'verboten".

Price will be less of an issue within a month. Announced wi-fi models are already price-matched or lower than entry iPad2's sell for. The problem for a while longer will be the OS. Honeycomb was released only because a couple of vendors were demanding it even tho it wasn't yet complete. Suppose it was devil if you do and devil if you don't. Perhaps IceCream will go a bit smoother later in the summer.
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post #30 of 44
Quote:
Originally Posted by r00fus View Post

I've put off buying a 3G iPad2 because I want to find out which network I should get it on... this increased choice is causing me some heartburn:

1) AT&T 3G
HSPA+ so the iPad2 is usable and resellable overseas.
Lower pricing tier ($15) but lower data cap (250MB)
Faster data
OK coverage

2) Verizon 3G
Higher monthly pricing
Better (1GB) lower tier
slower data
Better coverage

3) Wifi only
Cheaper
Already have a wifi only ipad
Will hotspots become more prevalent?


As you can see, I'm in a bit of analysis paralysis here with the 18 different iPad2 options (including size and color)!

And I thought they were crazy to debut with 6 options last year for iPad1!

Choice 4 is .... move out of the USA to almost any other country where tethering is free with any decent data contract.

Seriously, it's only a matter of time before the whole "pay me extra to use the same data again," thing is gone for good. I'm amazed that no one in the USA seems upset about it. Anyone who's been abroad knows that this is a raw deal.
post #31 of 44
Heads up to anyone in the UK - T-Mobile are currently giving away 12 months of data (500MB per month) with every pre-pay SIM. The SIM is free but there is a minimum top-up of £10.

So that's £10 for a year's data. Not a bad deal at all.
post #32 of 44
Quote:
Originally Posted by Gatorguy View Post

Price will be less of an issue within a month. Announced wi-fi models are already price-matched or lower than entry iPad2's sell for. The problem for a while longer will be the OS. Honeycomb was released only because a couple of vendors were demanding it even tho it wasn't yet complete. Suppose it was devil if you do and devil if you don't. Perhaps IceCream will go a bit smoother later in the summer.

"IceCream", FrozenYogurt, or with Oreo crumbs on top will not make a difference. Ad-Droid tablets of any flavour, nor Playbooks will stop the iPad. HP's WebOS has a very good chance, and as I've said before, when Microsoft get's it's act together.

This year is the year of the iPad. All of the rest put together will not add up to even 1 quarter's sell-thru of the iPad. "Smoothy" sales also don't count. I specifically wrote "sell-thru" as in to real customers using the devices.
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post #33 of 44
Quote:
Originally Posted by noexpectations View Post

Tethering has killed the 3G requirement for eReaders, tablets, etc.

Overall, a solid quarter for AT&T despite the Verizon iPhone.

I can see how some will want it but as an iPhone owner the option to tether has made anything but the base model iPad pointless for my needs.


Quote:
Originally Posted by mjtomlin View Post

Definitely not "definitely"!

It could simply mean, many iPad users did not sign up for service yet. The iPad does not require a service plan, therefor carrier numbers are not indicative of actual sales numbers.

Thats reasonable. I bought the iPad 3G last year and had no need to activate the 3G until I shipped it off to someone else when I bought an iPad 2. It was fun following it via MobileMe through the mail. For my iPad 2 I just went with WiFi.
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post #34 of 44
Last year I bought the 3g 32gb. This year I got the wifi only...and less storage space. I use the ipad to improve my browsing experience. I don't surf using 3g, period. 3g is great on my iphone because I can use gps, look up a restaurant, or leisurely check my favorite sites when waiting for a train...I'm not going to use my ipad to do any of these because it isn't hiding in my pocket. Nor am I going to waste my time surfing over a 3g connection when I could be reading. I'm a touch typist, so when I surf I am used to looking things up at the speed of whim. It's one thing to surf in the ipad over a strong wifi connection...it's something much, much different to surf over 3g. Easy call...never used it, never miss it. Maybe I'll bother with that technology in ten years. For now, I simply can't go from surfing at the speed of my own whim to watching a page load for up to thirty seconds at a time. Thirty times longer is exactly that. Don't get me wrong, I think it's great for some uses. My girlfriend loves having 3g...but she isn't using it to surf...she might browse "a" website on the train, and will respond to a few emails. I think most users of the iPad are not "power users." I think they are browsers, tinkerers, and game players. Browsers outnumber power users...and browsing is better on wifi, period.
post #35 of 44
Honestly, people amaze me. Everyone wanted a Verizon iPhone, and now that it's out, people are suddenly backpedaling? It's bizarre.

Do people actually believe the FUD about slower speeds with verizon? (AT&T faster speeds are only in very specific parts of the country) Or is not being able to surf the net while on a call really that big a deal? Um, no. Not in the face of 2-3 dropped calls a day, which is typical for me and my AT&T iPhone.

Maybe we've had to suffer with AT&T so long that we've actually been blinded by them?
post #36 of 44
3G tablet sales are not a surprise. I think a lot of people see a tablet as an at-home device, and most people already have wifi.
post #37 of 44
Quote:
Originally Posted by ThePixelDoc View Post

"IceCream", FrozenYogurt, or with Oreo crumbs on top will not make a difference. Ad-Droid tablets of any flavour, nor Playbooks will stop the iPad. HP's WebOS has a very good chance, and as I've said before, when Microsoft get's it's act together.

This year is the year of the iPad. All of the rest put together will not add up to even 1 quarter's sell-thru of the iPad. "Smoothy" sales also don't count. I specifically wrote "sell-thru" as in to real customers using the devices.

Then we actually agree! Imagine that!

Price won't be the issue. But the OS might.

EDIT: By the way, the cute name-calling makes replies seem a little juvenile. You make good points. No need to resort to mockery of competition.
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post #38 of 44
I believe that most who complained about AT&T switched to Verizon before it got the iPhone, hence the lack of impact to AT&T's numbers. I don't know that for a fact, but I know people who did just that, rather than put up with AT&T to get the iPhone: it depends on where you live.

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post #39 of 44
Quote:
Originally Posted by Gatorguy View Post

Then we actually agree! Imagine that!

Price won't be the issue. But the OS might.

EDIT: By the way, the cute name-calling makes replies seem a little juvenile. You make good points. No need to resort to mockery of competition.

Yes. You're right. Juvenile. Although it does get "their" attention, which I'm trying to point out when stating "Ad-Droid".

It is my firm belief that is why, and the only reason why, Google has decided to develop the platform in the first place: deliver more ads.

It's Google's fans that are constantly and consistently trying to point to some other motivation, like being an open-source good buddy, that I'm trying to warn about.

No I'm not a Google-hater by any means, but I do believe that, due to Google's true and ulterior motives, as well as their bottom-line success re: ads, that they are being evil and dastardly in setting up a lot of decent tech people for a big fall... or should I say... big FAIL.

I truly think Google is gonna get tired of it, as they have shown in the past, and bale on the project. They also truly are not as good in their labs, as they think are, since a good chunk of their projects are still "in the lab" to begin with....

...and... the Microsoft elephant has not quite entered the playground yet. Not a fan of theirs either... but they will need to be reckoned with sooner rather than later I suppose. Is Google up to it to battle Apple, Microsoft, & HP? I really don't think so... but that's my opinion.

So where were we? Uh ya... Verizon vs. AT&T... no comment. I'm in Germany where we all enjoy 3g, GSM, HSDPA, HSDPA+... and very shortly full LTE coverage. Na-na-nana-na! That's "juvenile"
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post #40 of 44
And that may perhaps be what really started this spat between Google and Apple. Steve Jobs wanted to use Google and yes, Android, as a bulwark against Microsoft. Guess the idea was that between the two of them they could sandwich MS with Google grabbing web revenue on one side and offering mobile services that Apple didn't want to be distracted by (yet?), with a bonus of a few free Google apps drawing attention away from MS services. Apple would of course have the hardware side covered. Eventually Google didn't walk the same line that Mr. Jobs envisioned, reportedly concerned that one or two players could lock them out of their bread and butter ad placement revenue. Android development went further than Mr. Jobs was comfortable with, eventually pushing him to issue an issue an ultimatum to Google about multi-touch. And there we go.

So now we see Apple actually being pleasant to their old nemesis Microsoft again. I'm assuming in hopes of making the same play they wanted to run with Google against MS to begin with.

One big soap opera in any case.
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