Now is the time to make connections

Bob Moon Oct 23, 2007

TEXT OF STORY

Scott Jagow: iMacs and iPhones and iPods are flying off the shelves. After the bell, Apple reported a 67 percent increase in quarterly profits. The company said it sold more than 2 million iMacs last quarter – a record. And it sold more than 10 million iPods. Apple’s shares rose 7 percent on the news.

AT&T’s stock was higher as well, thanks to its partnership with Apple on the iPhone. AT&T turns in its earnings this morning. Customers might find something they like in there, as Bob Moon reports.


Bob Moon: The cost of a high-speed Web connection might start coming down, because the battle to attract new customers is becoming more intense.

Craig Moffett is an analyst at Sanford C. Bernstein. He sees a leveling-off of new broadband subscribers:

Craig Moffett: There are now real questions about how much further growth there is left in this market.

Up to now, selling DSL Internet service has helped AT&T and other land-line providers hang on to customers who might otherwise be tempted to hang up on their phone company. But cable services have been offering faster connections and package deals that Moffett says are more attractive.

Moffett: The real value of a bundle isn’t that you get more things on one bill and save on a postage stamp. The value of the bundle is you can have multiple services delivered over one network with one cost structure.

Those discounts are a double-whammy for the phone companies, because customers aren’t just switching broadband — they’re also getting their residential phone service from their cable provider.

AT&T’s strategy may be “if you can’t beat ’em, join ’em.” It’s rushing to upgrade its phone network so it can offer TV service.

In Los Angeles, I’m Bob Moon for Marketplace.

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