Smartphones Are Dominating At AT&T

AT&T just released its first-quarter financial statement. Things are looking good at Ma Bell where profits are up although revenue missed expectations. The company managed to get more consumers to sign long-term wireless contracts, and best of all, wireless margins increased on the back of smartphone sales where they accounted for 88% of the company’s sales in the quarter.

In short, smartphones are ringing in the money for AT&T.

AT&T has long sought after the best smartphones. From the iPhone to the original Lumia 900, and most recently, to the HTC First, AT&T seemingly strives to have the latest and greatest smartphones.

I’ve often criticized this strategy, pointing to these exclusives when devices fail to capture a large market share. While the limited release might hurt the device’s sales, AT&T clearly isn’t suffering.

With this quarter’s numbers in the ledger, 72 percent, or 48.3 million, of AT&T’s postpaid phone subscribers owned smartphones, up from 61 percent, or 41.2 million, a year earlier. AT&T sold 6 million smartphones during the first quarter, which is a record and even more impressive considering there wasn’t a major smartphone release during that time.

As AT&T continues to hone its game, wireless margins grew driven by improved operating efficiencies and further revenue gains from the company’s lucrative smartphone subscribers. Its first-quarter wireless operating income margin was 28.0 percent versus 27.8 percent in the year-earlier quarter.