But what analysts may have missed is the fact that the iPhone is the stickiest phone in the history of the wireless business because of the App Store which enables these devices to be powerful pocket computing devices which run a plethora of applications. Sure, many applications are able to run across other platforms but they generally run less effectively as they other devices don’t have the UI Apple does. Regardless, no other device has the plethora of apps that run on the iPhone meaning every day that goes by where new apps are developed, more consumers are effectively locked in.

On the wireline front, voice revenue is down 5.4% but the company added 359,000 broadband customers and 284,000 U-Verse TV customers. Revenue per household is actually up. Business revenue was down 4.4% which is not surprising when you consider the volume of layoffs in the last year.

Although AT&T is in control of its broadband and TV business, it is extremely reliant on Apple for wireless revenue. The company is also a master of marketing. They run ads which tout the quality of their 3G network and how it faster than the competition but it is clear to everyone I know that Verizon has a superior wireless network in virtually all parts of the country.

I have always believed that in marketing, perception is reality but it seems that consumer education is so great that people do not believe the multimillion dollar ad campaign AT&T runs touting its network as the best and fastest in the world.

After all, if people believed the ads, why are they mostly buying iPhones and not other devices? But AT&T has to keep building its wireless brand because if it loses iPhone exclusivity, its wireless unit could be doomed with a capital D.

Years back I stated Verizon made one of the biggest blunders in business history (corporate malpractice really) by not carrying the iPhone. I still believe this to be true. But Verizon has done a marvelous job of making its wireless network better and this is where the profit is to be made.

This morning I was reading an article from Seeking Alpha which compared AT&T and Verizon and in the post which Greg Galitzine summarized, it says the AT&T 3G network is better than Verizon. Here is the amazing part to me… No one ever in my life has told me their experience with AT&T is better than Verizon. And I ask constantly. In fact, people reluctantly switch from Verizon to AT&T in every case I am aware of. And this is in virtually every case because of the Blackberry Bold or iPhone. How is it this isn’t common knowledge in the financial community?

Also, I should point out I carry a Verizon device and an iPhone because AT&T service has issues in so many places. I should also mention that on Metro North trains in Grand Central Station and between Connecticut and New York, AT&T is far superior to Verizon Wireless – but that’s about it as far as I have seen.

So in the end, AT&T marketing seems to be influencing the influencers but it has to work on its network quickly to be considered a wireless carrier people don’t reluctantly use.

And the company really needs to take wireless coverage more seriously because in 3-5 years, Internet TV will become a serious competitor to U-Verse meaning broadband and wireless will be the two areas of growth.