iPhone Outsells the BlackBerry Last Quarter

"Palm has previously announced that there will be a new version of the Palm OS by the end of this year, with devices running that OS in the first half of 2009. Stay tuned!"

Posted by: Jon Zilber | October 20, 2008 at 10:52 AM

Pilot 1000->Pilot 5000->PalmPilot Pro->IIIe->Vx->m505->T|T->T|T2->T|C->T|T3->T|T5->Zodiac 2->TX->Verizon Treo 700P->Verizon Treo 755p

Poor Palm, how a company just sits and watches, and does nothing is beyond me. Hopefully they have something up their sleeve for next year. Untill then, Im sticking with my BB.

Boost from iPhone but at a cost: AT&T
Correspondents in New York | October 23, 2008

APPLE'S iPhone is giving its sole US carrier AT&T a big boost in subscribers and buffering the impact of slower landline sales, but the success is coming at a cost that many AT&T investors do not like.

Because AT&T offers subsidies to make the iPhone more affordable in exchange for a commitment to monthly payments, strong sales lift its revenue but hurt profit margins. That weighed on the company's third-quarter results and drove its shares down 4 per cent by midday on Wednesday.

AT&T gained 2 million net new subscribers in the third quarter, in line with the average estimate of five analysts polled by Reuters. Overall revenue rose 4 percent to $US31.3 billion ($46.86 billion), also in line with Wall Street's forecast.

But it cut its forecast for profit margins this year, saying it now expects wireless margin to be "better than 37 per cent," compared with its previous forecast of 39 to 40 per cent.

"It's more dilution than even AT&T figured," Stifel Nicolaus analyst Chris King said, adding that the company may not know for years whether the deal is worth it.

"They'll need to hold on to these customers for at least three years to make it worthwhile."

According to Reuters Estimates, third-quarter profit excluding hurricane-related expenses and amortization costs but including costs related to the iPhone was 69 cents per share, lower than the average analyst forecast of 71 cents.

AT&T also lowered its forecast on full-year, adjusted operating income margin to 23 per cent from a previous outlook of 24 per cent.

Quarterly profit rose to $US3.23 billion, or 55 cents a share, from $US3.06 billion, or 50 cents a share, a year earlier.

The company said its deal with iPhone would prove valuable in the long run. The thinking is that advanced phones help attract new customers, who use their phones more and therefore pay higher bills.

"I know some of you will be concerned with the dilution we experienced this quarter with the new iPhone launch, but I believe our results will bear it out that it is an important investment in our future," chief financial officer Rick Lindner said.

Analyst Todd Rethemeier at Soleil Securities also said the success of the iPhone was good for AT&T in the long run. He kept a "hold" rating on the shares, saying a steady dividend and solid cash flow meant limited risk amid a weak economy.

AT&T, along with No. 2 player Verizon Communications, has been depending on wireless subscribers for growth amid a decline in its traditional wireline customers.

Wireline voice revenue fell over 8 per cent year-on-year, AT&T said. Analysts also noted an acceleration in wireline losses, a trend they have blamed on consumers opting for cheaper services offered by cable providers and internet companies.

Bernstein Research analyst Craig Moffett said a weak economy may be encouraging more customers to disconnect.

"Our worry has been that wireline telephony is increasingly viewed as a discretionary item," he said. "The easy alternative of 'cutting the cord' or switching to lower-priced cable telephony threaten to make an already bad situation worse."

AT&T has also been banking on growth in high-speed Internet services to stem the rapid decline in wireline customers, but analysts were unimpressed with the quarterly data.

The company said it had 14.8 million wireline broadband subscribers, up just 148,000 over the quarter.

Reuters