AT&T's Android sales are catching up to iPhone

@CNNMoneyTech October 20, 2011: 10:40 AM ET

NEW YORK (CNNMoney) -- AT&T's wireless customer base topped 100 million for the first time this quarter, even as iPhone sales slowed while customers waited for the new model.

AT&T (T, Fortune 500) activated 2.7 million iPhones in the quarter that ended Sept. 30, a decline from the 3.6 million iPhones it activated in the previous quarter. That trend should reverse in the current quarter: The new iPhone 4S hit stores Oct. 14, and Apple said it sold a record 4 million iPhones in the first three days it was available.

AT&T activated 1 million new iPhones in the first few days after the launch, AT&T Mobility CEO Ralph de la Vega said Thursday on a conference call with analysts.

"It's been our most successful launch in history," he said.

But Google's (GOOG, Fortune 500) Android is chipping away at the iPhone's lead. Sales of Android devices doubled compared to last year, and almost half of the 4.8 million smartphones AT&T sold this quarter were Android devices, the company said.

AT&T plans to release its first 4G LTE-capable smartphones this quarter. That plus the iPhone should make for "blockbuster" sales, de la Vega told analysts.

"We expect to have the best fourth-quarter smartphones sales we've ever had," he said.

AT&T's revenue for the third quarter was $31.5 billion, down very slightly compared to last year, but its sales from its two growth engines -- data and wireless services -- rose 5%, to $21.7 billion. The amount of money AT&T makes monthly off each of its core "postpaid" subscribers (those who take out long-term contracts) also rose for the 11th quarter in a row, reaching an average of $63.69. AT&T's net income for the quarter was $3.6 billion.

Smartphones aren't the only devices AT&T customers are snapping up: Data-only gadgets including tablets, aircards, MiFi hotspots and data-tethering plans are proliferating. AT&T added 505,000 data-only device connections to its network this quarter, for a total of 4.5 million.

AT&T archrival Verizon (VZ, Fortune 500), the nation's largest wireless carrier, will offer its third-quarter financial results on Friday. To top of page