Was The Iphone Deal Worth It For At&t?

The company on Wednesday reported adjusted third quarter earnings of 67 cents a share, four cents below Wall Street estimates. What’s notable is the reason AT&T fell short of its targets: The adjusted figure includes a 10 cents a share hit for iPhone 3G subsidies. AT&T had expected a 10 cents a share to 12 cents a share iPhone hit in the second half.

If you’re keeping score on this Apple-AT&T deal it’s clear that Steve Jobs & Co. is the winner in the early going. Morgan Stanley analyst Simon Flannery said in a research note that “iPhone dilution” spiked for AT&T. Now contrast that dilution to what Apple is seeing. Jobs drops in on an Apple earnings call, reveals a host of figures arguing that the company is a mobile juggernaut and is cautious about the economy but bullish about the company.

And why shouldn’t Jobs be stoked? He has AT&T subsidizing Apple’s iPhone and driving usage. AT&T did say that it activated 2.4 million iPhone 3Gs and 40 percent of them went to new customers. These customers have higher revenue per unit and lower churn.

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By: iPhone Lover

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