iPhone, Shift to the Wireless Web Boosts AT&T

Earlier this morning, AT&T announced that it activated 2.4 million new iPhones during the second quarter ending June 30, 2009 — what the company called its “best-ever total” since it exclusively started Apple’s hot new device two years ago.

Thanks to the brand-new iPhone 3G S and lower-priced $99 iPhone 3G, the company is continuing to print money off its partnership with Apple. As I’ve pointed out earlier, AT&T makes roughly $95 a month from each customer that owns an iPhone vs. about $59 from the average non-iPhone customer, so it’s in the company’s best interest to get more of its users to upgrade.

As you all remember, earlier this year I broke up with the iPhone because of AT&T’s network problems and since then a growing chorus has lamented those problems as well. Ma Bell cannot turn a deaf ear on these issues, for they are likely losing a lot of revenues because of them.

In a survey conducted by PriceGrabber.com, the company asked about 2,400 respondents why they had chosen to wait or not purchase the iPhone 3GS, and nearly 34.32 percent said they don’t want to switch to using AT&T as a service provider. If that is indeed the case, both AT&T and Apple are leaving money on the table.

That said, it was a good quarter for AT&T from a wireless perspective. The company added 1.4 million new wireless subscribers, and said it now has 79.6 million subscribers in total. AT&T also said that it had a record low postpaid subscriber churn, at 1.09 percent, which I would attribute to people switching to the iPhone and finding themselves stuck with 2-year deals.

AT&T activated about 3.5 million devices that qualify as higher-end smart devices – i.e. devices with QWERTY or virtual keyboards in addition to voice functionality. What that shows is that even its current customers are upgrading to the higher-end phones. This shift is proving to be a big boon for AT&T, which saw a 37.2 percent increase in wireless data revenues to $3.4 billion.

But it’s also part of a larger shift we’ve been writing about: the rise of mobile broadband as a platform, which brings with it numerous opportunities. (Mobilize 09, our mobile Internet conference scheduled for September 10 will focus on many of these opportunities.)

Earlier today, Pew Internet came out with a report that shows that more Americans are now using the wireless web.

“Use of the Internet on mobile devices has grown sharply from the end of 2007 to the beginning of 2009,” with 56 percent of Americans saying that have “at some point used wireless means for online access.”

It’s safe to say that the iPhone has been the catalyst for this shift to the wireless web. Maybe it’s time for me to update my post about how the iPhone will change the wireless business.

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