Now, that figure includes sales made abroad, so we don’t yet know how many were sold by AT&T (T), but it’s clear that the number was substantial. In its third quarter last year, AT&T activated 2.4 million iPhones and 40 percent of those were for subscribers who switched from other carriers. So the fact that Apple (AAPL) sold as many iPhones as it did in the company’s most recent quarter, bodes well for the carrier.

As Craig Moffett over at Bernstein Research notes, “It is entirely conceivable that AT&T’s iPhone alone will account for more than 100 percent of the entire industry’s post-paid subscriber growth in the third quarter.”

But therein lies the rub. For while sales of Apple’s handset remain strong, the heavy subsidies it requires have pushed AT&T’s wireless margins down. And the heavy data traffic associated with the handset have led to widespread complaints about AT&T’s network, forcing infrastructure upgrades. Worse, AT&T’s dependence on iPhone exclusivity at a time when Apple is clearly transitioning away from such a model leaves it quite vulnerable.

“While the strong sales of the iPhone are positive for AT&T in the near term, they increase the company’s reliance on a product for which we do not believe it will be able to maintain exclusivity,” Pali Research analyst Walter Piecyk wrote in a note to clients Tuesday. “We believe more than one third of AT&T’s post paid customer base is tied to an iPhone user and that mix is likely to rise significantly over the next few quarters.”

But not this quarter. This quarter, AT&T is expected to add 1.5 million to 1.7 million net wireless customers, driven by demand for the iPhone 3GS, which was released early on in the quarter. And while another drop in wireline customers is likely to weigh on results, it will be tempered once again by the iPhone. AT&T is expected to earn 50 cents a share, compared to 55 cents in the year-earlier third quarter, according to analysts polled by Thomson Reuters, who see revenue falling to $30.9 billion from $31.3 billion.

As the analyst notes, NPD data for the first two months of the September quarter show Mac sales up about seven percent year over year. iPhone sales are even more robust.

“Our checks indicate that worldwide demand for the iPhone 3GS is outstripping supply,” Munster writes. “This strong level of demand, we believe, will support unit sell-through of about 7.5m units in the Sept. quarter.”

Continuing, Munster notes that “PJC Wireless Analyst Mike Walkley’s checks for the first two months of the Sept. quarter indicated constraints at retail for the iPhone 3GS. We have also seen signs of constraints in international markets. Media reports indicate that the CEO of wireless carrier 3 Italia indicated that the company is selling 20k iPhones per month, but could sell more than double that amount if it had adequate supply.”

If this is problem, Munster asserts, it’s a fleeting one: “While supply constraint is a issue near-term, we see it as a long term positive, as worldwide demand appears to be very strong for the iPhone 3GS.”

In quarters past, Apple has guided revenue four percent below Street expectations on average and earnings-per-share 12 percent below Street expectations. But the company’s actual results have typically beaten those estimates by an average of three percent on revenue and by 24 percent on earnings per share. Munster expects this to be the case again when Apple reports earnings on Monday.

Over at RBC Capital Markets, analyst Mike Abramsky sees Apple’s forthcoming earnings report playing out in much the same way for largely the same reasons. “Checks show that the iPhone 3GS is the most popular Smartphone at AT&T and other global carriers (e.g., O2 UK, Rogers),” he wrote in a note to investors today.

“Despite launch in June,” Abramsky added, “some models of the iPhone 3GS were stocked out at Apple retail stores and carrier stores through Q4; however, checks show retail availability appears to have improved early September. While sell-through of the prior-gen iPhone 3G has been slow at AT&T since the launch of the iPhone 3GS, we believe the $99 iPhone 3G is gaining traction outside North America given lower upfront cost (important where prepaid is high).”

Rabid demand for the iPhone has emptied not just the company’s physical retail outlets, but its online store as well. “We continue to see extremely high levels of demand for the iPhone which means it comes in and out of stock very quickly and will be why the Web site hasn’t had any since Monday,” an O2 spokesperson told the Telegraph.

News of the shortage comes just days after O2 rivals Orange and Vodafone both announced plans to carry the iPhone later this year, bringing an end to O2’s exclusivity deal with Apple (AAPL). If Apple is unable to meet consumer demand with just a single U.K. carrier, how will it cope with three?

A reasonable question, but one for which Apple presumably has an answer. Said Forrester (FORR) analyst Mark Mulligan, “I don’t think [Apple] would expand if it couldn’t meet consumer demand, as that would lead to extreme consumer dissatisfaction–which compared to its peers, Apple is usually good at avoiding.”

“Based on our channel checks, the iPhone remains the best selling device at AT&T with both the new $200/$300 iPhone 3GS and $100 legacy iPhone selling very well,” Piper Jaffary analyst Gene Munster said in a research note today.

“In July, our checks had indicated store managers were strongly recommending the legacy iPhone,” Munster notes, “as we believe this was partially driven by store representatives hoping to make the sale with the 3GS stocked out combined with efforts to reduce existing inventory levels of the legacy iPhone. However, in August, our checks indicate store managers are increasingly recommending the 3GS, and we believe this is driven by improved availability of the 3GS at most AT&T stores.”

Munster summarizes: “Overall, the iPhone remains the best selling device and our August checks indicate the iPhone took share from BlackBerry, the Nokia E71x, and most other competitor products. Finally, in our checks at Best Buy, store managers indicated the iPhone was their best selling device with stores selling out of stock as soon as they received the Apple smartphones.”

A bullish assessment, with an even more bullish conclusion: Munster says he expects Apple (AAPL) to ship seven million iPhones in the quarter. If that’s truly the case, Apple should have no trouble beating Wall Street’s expectations for its current quarter despite the gloomy economy.

One last point worth noting here: Munster is not bullish on Apple’s event tomorrow. He describes it as a “non-event,” though he seems convinced Steve Jobs will host it. “We expect Steve Jobs to introduce a new iPod lineup with a new iPod touch, new nanos, and a new classic, with cameras in the new models,” he notes. “We expect the stock to trade off on a lack of surprising announcements.”

Nearly a third, 32 percent, said AT&T.

And another 23 percent said the quality, coverage and speed of AT&T’s network. (Click image below to enlarge.)

Now, that isn’t all that surprising given the swell of bad press that occurred when AT&T admitted at Macworld 2009 that unlike dozens of other carriers that it wasn’t ready to support iPhone tethering or MMS support. But it’s interesting that AT&T (T) is responsible for two of the top three complaints about an Apple (AAPL) product. I can’t imagine that’s going over too well in Cupertino.

Says ChangeWave: “There are no indications that Apple’s AT&T problem is going away. On the contrary, the better customers feel about their iPhones the worse they feel about AT&T–with nearly one-in-two 3GS owners citing AT&T-related issues as their biggest dislike. These survey results suggest Apple will be forced to deal with the issue sooner than many analysts expect.”

“There will be a day when we are not exclusive with the iPhone,” AT&T CEO Randall Stephenson said recently. And apparently, iPhone users are hoping that day comes sooner rather than later.

Reporting second-quarter earnings this morning (release, investor presentation), Sprint (S) posted a loss of $384 million, or 13 cents a share as customers defected to rival carriers. Revenue tumbled 10 percent to $8.14 billion.

Analysts surveyed by Thomson Reuters expected a loss of two cents on revenue of $8.13 billion.

A nasty miss, and one made worse by the loss of 991,000 subscribers in the crucial postpaid category. This after the troubled wireless carrier lost more than one million postpaids in the first quarter of 2009 and 1.27 million in the quarter prior to that. Sprint’s total subscriber count today: 48.8 million. As I said earlier this year, Sprint is hemorrhaging subscribers like Dan Ackroyd’s exsanguinating Julia Child.

And the Pre hasn’t done much to stanch the bleeding, though CEO Dan Hesse says Palm’s (PALM) smartphone has helped some. “In the second quarter, we made further progress on our efforts to enhance financial stability, improve the customer experience and reinvigorate the brand,” he said in a statement. “The widespread visibility surrounding our record-breaking June launch of the Palm Pre handset gave us an unprecedented opportunity to showcase these improvements to customers as ‘a new Sprint.’”

Indeed. Too bad so few people seem to be interested in them.

UPDATE:
During a conference call with analysts, Hesse suffered a barrage of questions about the Pre, its sales and how Sprint is faring against the iPhone 3GS. He declined to provide sales figures for the Pre and said only that its introduction has helped stave off customer churn. “I don’t want you to think there’s no impact from the iPhone,” he said. “It’s a successful device, but we’ve mitigated the impact with a strong device lineup.”

Reporting better-than-expected second-quarter earnings this morning, AT&T said it activated 2.4 million iPhone accounts–35 percent of them for new customers. And it saw its wireless data revenue rise 37.2 percent to $3.4 billion and subscriber churn fall to 1.09 percent, a record low.

Clearly, the debut of the iPhone 3GS and Apple’s decision to cut the price of the low-end iPhone to $99 had an enormous impact on AT&T’s bottom line. “AT&T iPhone subscribers, both new customers and upgrades, take two-year contracts with data packages,” the company said. “As a result, robust iPhone demand drives strong recurring revenues and substantial long-term value.”

Litter wonder, then, AT&T (T) is said to be doing it all it can to renew its iPhone exclusivity deal. The company is clearly dependent on the device for some of its most recent gains.

In fact, Commresearch analyst Gregory Lundberg says that were the iPhone to be excluded from the company’s latest financials, 25 percent fewer people would have signed up for its service in the second quarter than in the first. So if it’s true that Verizon (VZ) is in talks with Apple (AAPL) about adding the iPhone to its product lineup, AT&T has a lot to worry about, indeed.

As Pali Research recently noted, “As the iPhone exclusivity period rolls off between AT&T Wireless and Apple, a material number of AT&T customers will flock to Verizon’s superior network. We estimate that nearly a third of AT&T’s post-paid customers are being retained by AT&T primarily because of the iPhone exclusivity.”

Demand for Apple’s iPhone 3GS, which topped one million handsets sold in its first weekend at market, has surpassed even the company’s presumably aggressive targets. Reporting earnings Tuesday, Apple (AAPL) said it sold 5.2 million iPhones in its third quarter and finally copped to something that’s long been apparent to anyone who’s been keeping an eye on its iPhone availability widget: Demand for the new iPhone 3GS is far outpacing supply.

“The iPhone 3GS is currently constrained in virtually every country we’re shipping in…and we’re working very hard to fulfill that demand,” Apple COO Tim Cook said during a conference call with analysts, adding that if the situation persists, some overseas launches might be delayed.

“In terms of affecting the country rollout, I believe the vast majority of the countries that we are selling the 3G in we will be selling the 3GS I think by the end of the fiscal quarter,” Cook said. “It may move a date by a few weeks here or there…I don’t want to predict today when supply and demand will balance. I know that it will not balance in the short term. And I don’t want to give a prediction, because as you can guess it’s very difficult to gauge the demand without having the supply there to find out what it is.”

Cook added that Apple expects to bring the 3GS to most countries where the iPhone 3G is currently available by the end of the September quarter.

One last point worth noting here: Voracious demand for the iPhone has made the device the second-largest contributor to Apple’s bottom line, surpassing the iPod for the first time. Revenue for the iPod for the quarter slipped 11 percent to $1.492 billion, down from $1.678 billion. Meanwhile iPhone revenue grew 303 percent to $1.689 billion, accounting for 19 percent of the $8.3 billion in revenue Apple reported in its third fiscal quarter.

Amazing to think the device debuted just two years ago. If Apple’s business model is as, as Steve Jobs likes to say, a stool that rests on three legs–the Mac, the iPod and the iPhone–then it’s increasingly becoming one that never wobbles.

That’s a 16 percent spike, a far cry from the flat to five percent increase analysts had been anticipating. And if NPD is accurate, it means Apple has just had its best-ever June quarter for Mac sales.

Add to this indications that sales of the iPhone 3GS are tracking ahead of even Apple’s and AT&T’s expectations–remember, AT&T (T) said this year’s iPhone launch was its best-ever retail sales day and the largest ATT.com order day in the company’s history–and the quarter’s looking pretty damn good, even if the Apple’s iPod business is slowing down a bit.

So what can we expect? Apple (AAPL), known for giving conservative guidance, has said it expects earnings per share of between 95 cents and a dollar. Analysts are more optimistic. Consensus, as reported by Thomson Financial, calls for $1.16 per share. And folks like Andy Zaky over at Bullish Cross are betting on $1.35. Who’s right? We’ll find out tomorrow when Apple reports after market close.