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Quarterly iPhone Activations Break Previous Record: AT&T

7/24/2009 10:15:03 AM Eastern

Dallas
- AT&T's second-quarter iPhone activations surged to more than 2.4 million
to exceed the device's previous peak activation rate, which occurred in the
third quarter of 2008 when AT&T first began subsidizing iPhone prices,
company statistics show.

In the third quarter of 2008, AT&T
put iPhone activations at 2.4 million, and for the most recent quarter, the
company described activations as "more than 2.4 million."

iPhone activations in the May to June 2009 quarter surged 50
percent from the first
quarter's 1.6 million
. Activations surged largely due to the June 19 launch
of the 16GB and 32GB iPhone 3G S at $199 and $299, respectively, and a
reduction in the price of the 8GB iPhone 3G to $99 from $199. The 3G S models
double cellular-download speeds and double memory capacity over their
predecessors.

"The day of the launch was the best sales day ever for AT&T's
retail stores, and att.com experienced its largest order day ever on that day,"
AT&T said. More than a third of the iPhones activated in the second quarter
were activated by consumers new to the AT&T network, the company said.

AT&T's iPhone activations numbered 2.4 million in the third
quarter of 2008, 1.9 million in the fourth quarter of 2008, 1.6 million in the
first quarter of 2009, and more than 2.4 million in the second quarter of 2009,
written statements by the company show. AT&T hasn't disclosed the number of
iPhone activations during 2008's first and second quarters.

In other financial developments, the company said:

·        
the number of integrated 3G devices, or 3G
phones with hard or virtual QWERTY keyboards, operating on the network grew by
more than 3.5 million devices in the second quarter to account for 36 percent
of the carrier's 62.1 million postpaid subscribers. The numbers include the
iPhone.

·        
the combined number of postpaid and prepaid
subscribers grew to 79.6 million, up 6.7 million compared to the year-ago
quarter.

·        
the total number of postpaid subscribers hit 1.2
million to market the carrier's best-ever second-quarter net additions. The net
adds were up 20 percent from the year-ago quarter and 31.8 percent from the
first quarter of 2009.

·        
wireless revenues grew 10.1 percent from the
year-ago quarter to $13.3 billion but net income grew only 2.7 percent to $3.2
billion as operating-income margins declined to 23.8 percent from 25.5 percent.

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