The iPhone's influence is alive and well

AT&T will sell a Windows phone but admits there will be challenges.

By Motley Fool Pick of the Day Nov 21, 2011 3:20PM
By Tim Beyers


Try as it might, AT&T (T) is finding it hard to resist the long-term allure of the iPhone.


Glenn Lurie, head of Ma Bell's emerging-devices group, told investors at a conference in Barcelona that the company is negotiating to carry Windows smartphones built by Nokia (NOK) sometime next year. He also said that Microsoft (MSFT) will face "a lot of challenges" in trying to win market share from Apple (AAPL) and Android rivals HTC and Samsung, Bloomberg reported.Microsoft owns and publishes Top Stocks, an MSN Money site.

Translation: We like Windows, but we know where our bread gets buttered.


Mmmmmm, iPhone
No device has added more flavor to AT&T's recent results than the iPhone. Ma Bell has activated more than 6 million Apple handsets over the past two quarters alone.


Android has also had an impact. Google's (GOOG) mobile OS accounted for about 40% of AT&T's smartphone sales in the second quarter. In Q3, Android handset sales doubled, while close to 50% of all smartphone sales were for something other than an iPhone. All of which, interestingly, speaks to just how alluring the iPhone remains.


Say what you will about Android or new handsets from Research In Motion, but more than half of AT&T subscribers still prefer iCandy -- and that's despite the hoo-ha over Apple's not-quite iPhone 5. (Otherwise known as the iPhone 4S.)


What a Windows Phone means
Lurie wasn't and isn't knocking Windows. He's just admitting what we already know. As good as the new Mango OS looks -- and as good as Windows 8 might be -- developers have already committed huge resources to Android and iOS.


Hewlett-Packard faced the same issue when it couldn't find a buyer for Palm. WebOS isn't bad; it just isn't so awesome that it deserves attention when compared with the money to be made writing for other operating systems.


AT&T knows this, and like any other carrier, it's going to put the most resources behind handsets built to sell. Will Nokia's Windows handsets fit the profile? Lurie, like the rest of us, is admitting that he doesn't know. Whatever deal Nokia and AT&T come to will reflect this variability, and as a result the terms will come well short of what Ma Bell pays for distributing the iPhone.


Fool contributorTim Beyers owned shares of Apple and Google at the time of publication. The Motley Fool owns shares of Apple, Google, and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Google, Apple, and Microsoft and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.



Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123 rated 1
262 rated 2
480 rated 3
651 rated 4
649 rated 5
629 rated 6
616 rated 7
496 rated 8
346 rated 9
111 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.