AT&T's sales dominance of iPhones double-edged

NEW YORK -- AT&T is still the home of the iPhone. It activated 7.6 million of the devices in the latest quarter, accounting for one out of every five sold globally, beating Verizon Wireless' 4.3 million activations handily.

But AT&T's iPhone dependency comes at a heavy cost. The phone is more expensive than many others, and AT&T needs to subsidize each unit with hundreds of dollars.

That, together with charges for adjustments in the value of the company's pensions, the breakup of a deal to buy T-Mobile USA and a writedown of the value of its phone-directory business, forced AT&T to report a massive fourth-quarter loss Thursday of $6.68 billion. It was the first quarterly loss for AT&T in three years.