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News Update: AT&T CEO Admits Apple's iPhone Is Major Sales Driver, But Says Customers Are Locked In

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Published on Sep 21, 2010

While at an investor conference sponsored by Goldman Sachs (NYSE:GS), AT&T (NYSE:T) Chief Executive, Randall Stephenson, acknowledged that Apple's (NASDAQ:AAPL) iPhone 4 is driving "a lot" of its smartphone sales, or what he referred to as "integrated devices." He added that these sales are locking many customers into long-term contracts that will not end if Apple's iPhone goes to another carrier. Stephenson said, "If you look at the iPhone base, about 80% is either on a family-talk plan or in a business relationship with us." He went onto say, "Those customers tend to be very sticky. They don't churn very frequently." The possibility of losing AT&T's exclusive contract with Apple has been a major topic of concern for many T investors, especially as the quality of its service has received heavy criticism in recent months. Stephenson also said that about two-thirds of the current iPhone customer base already was with AT&T before getting the device. While details of the contract between Apple and AT&T have never been publicly disclosed, it is widely projected by many Wall Street analysts that Apple's iPhone will move to another carrier like Verizon (NYSE:VZ) by early next year. Stephenson said the smartphone market has further room for growth. SmarTrend is bullish on shares of AT&T and our subscribers were alerted to buy on July 26, 2010 at $25.88. The stock has risen 11.1% since the alert was issued.

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