True, the device is a clear draw to consumers. As we recently saw, AT&T informed investors it will set an all-time record for smartphone sales in its current quarter, and the iPhone was probably no small player in helping AT&T achieve this impressive feat, as we now know the new iPhones sold like hot cakes in their first weekend on the market.
However, investors weren't as enthusiastic about the news as one might expect and promptly sold the stock off. Why? Because while a blessing over the long term, heavily subsidized smartphones like the iPhone can be a curse to AT&T's margins in the short term. In the video below, Fool contributor Andrew Tonner discusses this peculiar scenario and how it should affect AT&T in greater detail.
Fool contributor Andrew Tonner owns shares of Apple. Follow Andrew and all his writing on Twitter at @AndrewTonner. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.