Apple iPhone Needs AT&T and the US. The Numbers Show It

For all the diversification of products and marketing that Apple (AAPL) has been pursuing, the iPhone is still a big money maker. The average iPhone provides more than $650 in net revenue to Apple, as I noted after going through its earnings information from last quarter. But the latest AT&T (T) earnings report underscores a different point: no matter how much people may complain about the carrier's service, Apple loves it. That's because without AT&T, Apple's iPhone unit sales could take a huge hit.

For a moment, put aside the debate of whether Apple brings the customers to AT&T or visa versa. The carrier reported that it had activated 3.1 million iPhones last quarter. Assume for a moment that activations roughly parallel handset sales. (Even if the carrier has inventor, it will have to be replaced.) Apple sold 8,737,000 iPhones last quarter, suggesting that AT&T accounts were responsible for 35.5 percent of all iPhones sold -- over a third.

It's a heavy number, especially when the iPhone is a major driver of Apple's financial success (with or without the recent change in accounting rules that boosted last quarter's appearances). No wonder the iPad is set to work in this country only with AT&T. I still think that Apple will have to bring in at least Verizon (VZ) as a second carrier here. And it may be that the real driver is not AT&T so much as the U.S. market. But any trepidation that management may have over changing that status quo is more understandable.

Image via stock.xchng user lockstockb, site standard license.