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AT&T reveals slipping iPhone sales

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Sales of Apple's iPhone are slowing as potential buyers await the long-rumored refresh of the popular smartphone.

On Wednesday, AT&T released its financial results for the first quarter of 2009. Among the details of the report - which showed revenue to be essentially flat, year-on-year - was the news that iPhone activations have slipped to 1.6 million during the quarter.

That's down from 1.9 million in Q4 2008 and 2.4 million in Q3 2008.

The slippage parallels that of sales of the original iPhone in AT&T's second quarter of 2008, when the company reported "reduced iPhone sales ahead of the early July iPhone 3G launch."

After the iPhone 3G was released on July 11, 2008, however, AT&T crowed that "In the first 12 days following launch, sales of the iPhone 3G were nearly double levels achieved in AT&T's 2007 iPhone launch."

The telecom giant can only hope that they'll experience the same surge when the new iPhone - or iPhones - appear as early as this June.

AT&T has benefited mightily from the iPhone. The company's last three earnings reports have reported that about 40 per cent of iPhones were sold to customers new to AT&T. With the company's landline business slipping, those new wireless subscribers provide a welcome cash infusion.

AT&T apparently sees iPhone sales as key to future profitability, seeing as how the company is reportedly dickering with Apple to extend its exclusive deal until 2011.

Exactly what will lure current iPhone owners to upgrade to a new model - and perhaps pass their current phone down to their kids - remains unclear. Apple, as usual, isn't saying.

But a review of recent Apple patent filings reveals such possible goodies as a self-resizing interface, video mail, biometric security, and more. Of course, merely filing a patent doesn't mean that a product based on it will ever appear - Apple, for example, filed a tablet-Mac patent way back in 2005.

Rumors about the new iPhone have also come hot and heavy, including a 3.2 megapixel camera, video editing, hotter processors, and the oft-discussed iPhone nano.

Whatever Apple has up its sleeve, one thing is certain: AT&T is looking forward to it helping to fatten their bottom line. ®

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