AT&T announced it sold over 10 million smartphones in Q4 2012.
The figure tops its previous record quarter of 9.4 million sold in Q4 2011 Android and Apple smartphones made up a large part of AT&T sales.
"We had another incredible quarter of smartphone sales as the mobile Internet continues to drive strong growth in wireless," said Ralph de la Vega, president and chief executive officer for AT&T Mobility. "These are the industry's most valuable postpaid subscribers with average revenues twice that of non-smartphone subscribers.
The telecommunications provider reported sales of more than 110,000 smartphones a day with customers buying the latest Windows, Android and Apple devices.
AT&T will release its fourth quarter 2012 results on January 24.
While AT&T has seen an increase in smartphone sales, Analysts from Strategy Analystics say that global smartphone shipments are expected to drop 27% this year.
The predicted decrease will mean that only 875 million smartphones are expected to shipped.
Analysts say this is due to declining growth in several markets including China, Western Europe, North America and developing Asian countries.
However, Deloitte analysts have a more positive outlook for the smartphone future and predict that shipments will reach 1 billion for the first time in 2013.
Deloitee predicts that smartphones with less features but with prices as low as $50 will help increase smartphone shipments in emerging markets.