September 22, 2010

Half A Million iPad Owners Use AT&T Network

More than half a million iPad owners are using AT&T's cellular network to surf the Web, said AT&T's chief executive Randall Stephenson on Tuesday.

AT&T Inc., the No. 2 U.S. mobile network operator, is the exclusive provider of 3G cellular service for Apple's iPad, and is the exclusive U.S.-based carrier for the Apple iPhone.

"We have over half a million iPads connected to the network," Stephenson told financial analysts at the Goldman Sachs Communacopia XIX Conference in New York City, according to Reuters.

"And you're going to see a stream of new tablets come to market from a number of carriers," he said.

"That's a whole new growth prospect for this industry that is really just in its infancy as well.

"We're at the really early stages of this connected device phenomenon," he continued. "It's a very nice business model."

Apple launched the popular iPad tablet computing device in April in the U.S., selling 3.27 million units during the second quarter alone.

But the fact that just 500,000 iPad owners are using AT&T's network could indicate that many are not interested in doing so.  If the trend continues, this could result in disappointing growth prospects.

"Half a million at this point would seem low," said Pacific Crest analyst Steve Clement during an interview with Reuters.

However, Stephenson was optimistic about his company's wireless business, saying he expects record sales of smartphones such as the iPhone 4 this quarter.

"In the third quarter we're on pace to set a record for integrated devices," he said, referring to devices with computer-like keyboards and smartphones such as the iPhone 4, the BlackBerry Torch and Samsung's Captivate.

Some 53 percent of AT&T's customers now use integrated devices, and account for roughly 80 percent of the company's sales, Stephenson said.

Stephenson addressed other areas of the company's business, such as wired broadband, which is on the rise again following a weak third quarter.  However, high unemployment is taking a toll on the company's enterprise business, with improvements not expected until hiring picks up.

The chief executive was asked whether AT&T was considering a possible acquisition of any non-U.S.-based firms. Stephenson confirmed he had searched for possible targets, but could not find any firms that would add value for the telecom provider.

Separately, a new study from professional service firm Deloitte finds that half of U.S.-based iPhone users would be "very interested" in switching from AT&T to Verizon Wireless for cellular services.

The online survey, conducted in June and July, queried 2,000 U.S. consumers between the ages of 14 and 75 years old about how they used their mobile devices.

Shares of AT&T's stock were down 0.55%, or 15 cents, during trading on Tuesday, closing at $27.14.


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