As the broader market rallies this morning, shares of AT&T (NYSE: T) are selling off. The problem? Post-paid net additions, or "paying subscribers" in common parlance.

Ma Bell reported just 62,000 net new wireless handset customers in the first quarter. That's down 88% from 512,000 in last year's Q1, in the days before AT&T was forced to compete with Verizon (NYSE: VZ) for iPhone customers.

Does that sound bad? Well, it is. Apple's (Nasdaq: AAPL) iOS device users tend to be big spenders. Roughly 25% of iPad owners also have an iPhone, comScore reports. Losing prospective fat-walleted subscribers like these to a competitor is never good news.

The shortfall showed up in the financial statements. Overall wireless revenue rose 10.2%, but segment operating income fell 5.3% as margins declined from 30% in last year's Q1 to 25.8% in this year's first quarter. New devices based on Google's (Nasdaq: GOOG) Android operating system couldn't bridge the gap.

Companywide, AT&T said revenue grew to 2% to $31.2 billion, while profits improved 39% to $0.57 per diluted share. Both figures matched analyst estimates.

Is that showing really so bad? I don't think so. Cash from operations funded virtually all of AT&T's $4.1 billion in capital spending, $1.3 billion in debt repayments, and $2.5 billion for dividends. Income investors can rest assured that the stock will continue to yield a remarkable 5.70%.

So while I get investors' concerns over competition and call quality, it's important to remember that more of us are getting our daily dose of cloud via devices connected to AT&T's network. And as the numbers show, with or without iPhone competition, the rise of this New New Thing (i.e., cloud computing) puts plenty of cash in Ma Bell's coffers.

Do you agree? Disagree? Tell us what you think about AT&T's results, network, and the company's forthcoming merger with T-Mobile using the comments box below. You can also rate AT&T in Motley Fool CAPS.

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Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. 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 owns shares of Apple and Google. The Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is calling. Are you there? Pick up!