• by Mark Walsh  @markfwal, April 20, 2011

When Verizon Wireless introduced its own version of the iPhone in February, analysts and others had concerns about the impact it would have on AT&T iPhone sales.

Judging by AT&T's first-quarter results at least, not much.

The carrier's iPhone activations increased by 1 million from a year ago to 3.6 million, and AT&T sold a record 5.5 million smartphones overall during the quarter. Nearly half (46%) of AT&T's 68.1 million contract customers now own smartphones, up from 34.7% a year earlier.

Still, the carrier added only 62,000 contract customers in the first quarter compared to 512,000 a year ago. AT&T added 2 million total wireless subscribers, mostly through connected devices, like its MiFi hotspot tool.

Wireless data revenue -- driven by messaging, Internet access to apps and other services -- increased by $1 billion, or 24%. Apple sold 322,000 tablets during the quarter, down from 442,000 in the fourth quarter.

Overall, AT&T reported first-quarter revenue of $31.2 billion, up 2.3% from a year ago. Net income of $3.4 billion, or 57 cents a share, jumped 39% from the year earlier on the strength of the company's wireless business.