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AT&T CEO: iPhone 5, business mobility resistant to economic worries

AT&T CEO Randall Stephenson says both businesses and consumers will pay up for mobility---especially the iPhone 5.
Written by Larry Dignan, Contributor

AT&T CEO Randall Stephenson said that business technology spending remains strong for all things mobile and he's surprised by consumers' anecdotal willingness to shell out full prices for devices like Apple's iPhone 5.

The short version of Stephenson's talk at the Goldman Sachs Communacopia Conference is that not all niches of tech are created equal.

On the business side of the spending equation, Stephenson noted that the fiscal cliff---and the possibility that taxes will go higher---has put enterprises on standby. A high unemployment rate also means AT&T isn't growing its landline business.

But mobility is a different story. Stephenson said:

We are still not seeing businesses slow down on what they will spend on mobility. In effect, the lion's share of our growth in mobility is coming from business segment. And so if it involves productivity, if it involves efficiency and taking costs out of the businesses, businesses are investing and spending money there. We are seeing it in mobility.

That penchant for all things mobile is carrying over on the consumer front too. He added:

What continues to surprise me and surprises me from a good standpoint is that in that light and in that context, the consumer continues to spend money as well. We launched a new iPhone and do pre-order sales and it is setting records. We are having record sales with iPhones and across the board the portfolio, all the smartphone business is hot. Tablets are still selling and it will be interesting to see how the Kindle Fire does, but a new product in the marketplace is getting a lot of attention. It looks like it is going to sell well. So the consumer is spending money.

Meanwhile, as noted by CNET, some unquantified number of consumers may pay full price for the iPhone 5 and upgrade out of cycle. Here's what Stephenson said on that front:

I don't have any hard data and it is too early to know how that will play out. Are people going to be jumping out and upgrading even though they are not eligible for an upgrade under the normal cycle? Anecdotally, I just have a lot of friends who are saying I want a new iPhone and I know for a fact I got them a new one year ago, so they are wanting a new one. So anecdotally, we are seeing a lot of people who are demonstrating a willingness to buy a new iPhone even outside of the upgrade cycle.

But I have no data that I can share with you as to whether that is the case. The pre-orders, we don't have any insight yet as to the magnitude of that. So we will see. But this continues to be a product that just has incredible demand and people are willing to pay to get it. And so I think it will be interesting to see how this plays out over the next -- we will know in the next couple of weeks.

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