AT&T to Activate 4.5 Million Apple IPhones This Quarter, Analyst Says
AT&T Inc. may activate 4.5 million Apple Inc. iPhones this quarter, 41 percent more than last quarter, helping increase customer additions at the largest U.S. phone company, a Hudson Square Research analyst said.
Todd Rethemeier boosted his estimate of iPhone activations for the third quarter from a previous forecast of 3.5 million. He said AT&T would add a net 750,000 customers on monthly contracts, up from a prior estimate of 600,000. AT&T last quarter activated 3.2 million iPhones and 496,000 contract subscribers.
“Demand for the iPhone seems to still be strong,” said Rethemeier in a note today. “Many stores have been out of stock recently, and ordering on the Internet has a 1 to 3 week wait time.”
AT&T has relied on its iPhone monopoly in the U.S. since the device’s 2007 debut to fend off Verizon Wireless and Sprint Nextel Corp. The carrier may lose its exclusive hold on the device to Verizon as soon as January, two people familiar with the plans have said.
“AT&T is locking more customers into new two-year contracts,” said Rethemeier, who recommends buying the stock and doesn’t own any. “If the exclusivity on the iPhone does end this winter, locking up these customers is important.”
He lowered his estimate of third-quarter earnings per share to 54 cents from 62 cents, citing the cost of subsidizing the iPhone for current AT&T customers who are upgrading. That compares with the 57 cent average of 23 analyst estimates compiled by Bloomberg.
AT&T rose 10 cents to $27.93 at 4 p.m. in New York Stock Exchange composite trading. The shares are little changed this year.