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

Posted:
in iPhone edited January 2014
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."
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Comments

  • Reply 1 of 43
    MacProMacPro Posts: 18,249member
    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.
  • Reply 2 of 43
    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?
  • Reply 3 of 43
    gatorguygatorguy Posts: 20,615member
    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.
  • Reply 4 of 43
    Tethering has killed the 3G requirement for eReaders, tablets, etc.



    Overall, a solid quarter for AT&T despite the Verizon iPhone.
  • Reply 5 of 43
    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.
  • Reply 6 of 43
    blastdoorblastdoor Posts: 1,920member
    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.
  • Reply 7 of 43
    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...
  • Reply 8 of 43
    d-ranged-range Posts: 396member
    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)
  • Reply 9 of 43
    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.
  • Reply 10 of 43
    markbmarkb Posts: 153member
    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.
  • Reply 11 of 43
    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*
  • Reply 12 of 43
    lkrupplkrupp Posts: 7,085member
    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.
  • Reply 13 of 43
    lkrupplkrupp Posts: 7,085member
    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...
  • Reply 14 of 43
    tjwaltjwal Posts: 404member
    They added 62 thousand new customers and activated 1 million new iphones. the iphone is still doing fine.
  • Reply 15 of 43
    djkikromedjkikrome Posts: 189member
    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.
  • Reply 16 of 43
    lilgto64lilgto64 Posts: 1,147member
    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.
  • Reply 17 of 43
    moshemoshe Posts: 3member
    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.
  • Reply 18 of 43
    mjtomlinmjtomlin Posts: 1,857member
    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.
  • Reply 19 of 43
    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.
  • Reply 20 of 43
    rob55rob55 Posts: 1,255member
    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?
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