AT&T is the Star of iPhone 5 Pre-Orders
AT&T (NYSE:T) appears to be the runaway winner among U.S. carriers selling the iPhone 5, with two-thirds of all pre-orders for the latest Apple (NASDAQ:AAPL) smartphone going its way, Zacks Investment Research said in a report on Monday.
“The second-largest U.S. mobile service provider AT&T is dominating the market for Apple iPhone 5 sales,” the research firm said in its report. “The company saw an astounding demand for the new iPhone, despite two of its rival carriers also offering the product.”
Zacks cited a comScore study that found AT&T accounted for about 68 percent of total online sales of the phone over the first three days, marking the carrier’s best ever performance for the iPhone. Verizon (NYSE:VZ) and Sprint (NYSE:S) accounted for 24 percent and 8 percent share of iPhone 5 sales, respectively. AT&T had received 48 percent of pre-orders for the iPhone 4S over the first three days, and was followed by 35 percent for Verizon and 17 percent for Sprint.
“Going by the iPhones’ track record, we expect AT&T to gain more subscribers from the new iPhone 5 and consequently will be raking in higher revenues,” Zacks added. “While iPhones are offering a strong growth momentum, the related high-marketing cost is hurting AT&T’s earnings. The company now has to pay $100 extra per phone to Apple, when compared to previous iPhone 4S, in the form of subsidy. Thereby, this lofty subsidy of $400 per iPhone 5 will be dilutive to the company’s earnings for the next several quarters.”
AT&T was the exclusive provider of the iPhone from 2007, when Apple launched the first model, to February 2011, when Verizon received the iPhone. The new iPhone has a new four-inch Retina display, a faster processor, and LTE-compatibility.
Apple announced it sold over 5 million units of the new phone in the three days since it hit stores on September 21 and that the company was “working hard to build enough iPhone 5s for everyone.”
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