More Proof that AT&T Needs to Keep Its iPhone Exclusivity

By MG Siegler

An internal AT&T (T) memo that was leaked Thursday is full of very impressive numbers regarding the iPhone 3GS — numbers that once again show why AT&T’s exclusive contract with Apple (AAPL) to sell the iPhone in the U.S. is so important.

The iPhone 3GS’s launch gave AT&T its best sales day at its retail stores — ever, its second largest traffic day at retail stores, the most transactions it has ever processed in a day, the most orders through att.com in a single day ever and the biggest features sales day at att.com ever. Oh, and it led to the most upgrade eligibility checks ever, which is not surprising at all, though most were probably disappointed.

What’s crazy about all this though is that while many people were expecting the iPhone 3GS launch to pale in comparison to the iPhone 3G launch, it actually exceeded it in just about every way when it came to actual sales (at least through AT&T’s stores and online). The lines may have not been as long at stores because of pre-sales, but sales overall exceeded the 2008 launch day numbers, and all of the heavy holiday shopping times. And apparently iPhone 3GS sales exceeded the iPhone 3G launch day sales by noon Central time.

AT&T’s exclusive contract with Apple for the iPhone is set to expire next year. There has been a lot of talk about AT&T wanting to extend the deal for at least another year, but there has also been talk of Apple flirting with rival Verizon (VZ).

It seems pretty clear that Apple is getting up to the limit of where it takes the iPhone with AT&T. The biggest complaint about the device now seems to be the service provider. And if it can sell millions of units in just days on just one provider, imagine what it can do if it were on two — or better, all of them.

Below find the memo. You’ll also note that on the day of Michael Jackson’s death, AT&T saw more text messages sent than ever before — exceeding even that of American Idol finales and New Year’s Eve. That’s pretty insane, especially considering what a rip-off text messages are.

1. Fact of the Week: On June 25, the day Michael Jackson died, text messages sent on our network spiked at 65,000 messages per second — the largest volume ever recorded — surpassing events like American Idol voting and New Year’s Eve, when millions of our customers wish their friends and family a happy new year via text.

2. iLaunch day 2009 was one for the record books, as AT&T customers scrambled to get their hands on the fastest, most powerful iPhone yet.

Here’s a look at some of the milestones we achieved:

• Best-ever sales day in our retail stores
• Second-largest traffic day in our retail stores
• Most transactions processed via our IT systems in a single day
• Most upgrade eligibility checks in a single day
• Largest order day in att.com history
• Largest features sales day in att.com history

On this year’s launch day, iPhone sales exceeded sales recorded on 2008’s iPhone launch day, Black Friday 2008 and Dec. 26, 2008 — all heavy-volume sales days. In fact, this year we surpassed 2008’s launch day sales at about noon Central time, and sustained our previous peak hour record, also set in 2008, for 11 straight hours.

[photo: flickr/Jen SFO-BCN]

Original post

Comments

[Neil459:]

Can't wait for Apple to buy ATT.

Disclosure: Long APPL

Jul 02 05:41 PM

[Frank Castle:]

So what is better all your sales the first week or a steady amount over a longer period? I'd love to see how many sales were to new users vs. upgrades to exsisting iPhone users.

As everyone knows the Apple faithful rush out to buy the new products.

Awaiting to see demand for the $99 3G as well.

Jul 02 09:58 PM

[mollytjm:]

All you have to do is go to any mall or area with a lot of people and it's very obvious that more people are playing with more iPhones and talking on them. The lines at the stores i went to did have some people who already had the iPhone and were upgrading, but mostly it was people with other phones, waiting in line for the iPhone.

trying to put iPhone sales onto 'the Apple faithful' is just missing the entire point. Look at how little market share Apple had a few years ago... so how many 'faithful' could account for this phenomenal growth?!!

Tech consumers are finally catching on... tech products have to be easy to use and reliable, without a lot of glitches. Apple's OS is terrific. People who have switched to Macs, don't go back to PC's.
Those are the people who eventually become 'the faithful'...but it's not a blind faith, by any means. It's earned by Apples' good innovation and good customer support.

Jul 03 09:19 AM

[waf76:]

long apple and iphone user, i waited on line for 3 hours for the 3G but this time around for the 3GS, no line, in and out in 10 minutes. I wasnt eligible for the 199, or 299 pricing but was for 299, and 399 and i went for it so im sure other early adopters did as well. Since these sales will be realized over 8 quarters for Apple, the stock really doesnt reflect the company's true value with these largest revenue quarters on record in the biggest depressionary period of our time, highly impressive. and apple sold more phones than they gave to att to sell bc att didnt want to give excessive commissions to their employees for ringing up new contracts

Jul 03 12:19 PM

[Nick Rao:]

The At&t and Apple partnership has been a success for both firms. At this juncture, the relationship favors At&t. For Apple to accelerate growth in the US, they must expand their coverage model. This is what will drive them to do a deal with Verizon Wireless. Both Apple and Verizon Wireless will realize tremendous leverage from the deal. The loser might seem to be At&t, but they will still have the iPhone and subsequent upgrades. I don't believe that the churn from At&t will be significant. At&t will hold on to subscribers. The real loser will be SPRINT, who is the most vulnerable to a Verizon Wireless - Apple deal.

Jul 04 10:33 AM