iPhone 4S Spurring Record Smartphone Sales for ATandT

AT&T CFO John Stephens said the carrier will sell more than 6 million smartphones in the fourth quarter, thanks largely to sales of Apple's iPhone 4S.

AT&T (NYSE:T) is on pace to break its previous smartphone sales record for a single quarter, thanks largely to sales of Apple's (NASDAQ:AAPL) popular iPhone 4S handset, said AT&T's CFO John Stephens.

The No. 1 U.S. wireless carrier has already sold roughly 6 million smartphones through the first two months of the quarter, Stephens revealed at the UBS 39th Annual Global Media and Communications Conference in New York Dec. 6. AT&T's fourth quarter began Oct. 1.

"Going into the quarter, we expected this to be one of our strongest smartphone sales quarters ever," Stephens said. "What we didn't know is that we would nearly break our smartphone sales record in just the first two months of the quarter. Through November, we have sold about 6 million smartphones, or about 100,000 smartphones a day."

With the rest of December-traditionally one of the strongest sales months for phone carriers and other consumer businesses-ahead of it, AT&T is on track to sell as many as 9 million smartphones for the quarter. That would smash the company's previous, single-quarter smartphone record of 6.1 million units, set in the third quarter of 2010.

Stephens said AT&T in large part owes its strong smartphone sales to handset upgrades from customers who were waiting for the iPhone 4S, which the carrier released Oct. 14, starting at $199.99 on contract.

AT&T activated more than 1 million iPhone 4S units in the first five days of devices sales, and sales of that handset remain strong. AT&T also sells the iPhone 4 for $99 on contract and gives away the older iPhone 3GS free with a two-year data deal.

AT&T also sells Research in Motion (NASDAQ:RIMM) BlackBerry smartphones, and has come in strong in Android handsets in 2011. The company has pumped out more than 20 Android handsets, including three 4G Long-Term Evolution (LTE) models-the Samsung Galaxy S II Skyrocket, HTC Vivid and the LG Nitro-since January. The carrier also launched the HTC Jetstream Android Honeycomb tablet.

Stephens also said that AT&T will arrive in more 4G LTE markets, such as New York City, later this month. The company plans to cover 70 million people with its LTE network, spanning more than 15 markets, this year.

Finally, Stephens noted that AT&T and Deutsche Telekom are continuing to move ahead with the T-Mobile merger, despite the great obstructions it faces from U.S. regulators.

"It's for our customers. It's a solid, strategic move that will help us provide better service while addressing the spectrum concerns that everyone in our industry shares," Stephens added.