Demand for wireless services is rising sharply in North America. That’s partly because device makers continue to release new cellphones and wireless devices, such as Apple’s iPad and Amazon’s Kindle e-book reader.

As well, more customers are switching from traditional phones (or land lines) to wireless services. Smartphones, in particular, have become increasingly popular. Aside from functioning as mobile phones, these devices have many computer-like functions, including Internet access and email.

Apple’s iPhone and Research in Motion’s Blackberry are today’s top-selling smartphones. However, other firms, such as Motorola and Samsung, have introduced new smartphones in recent months, as well.

Network operators offer lower-risk wireless profits — and many are high dividend stocks

We think wireless carriers provide a conservative way for investors to profit from rising use of smartphones and other wireless devices.

That’s because, aside from wireless operations, many wireless carriers also operate traditional phone, Internet and television businesses. This diversity lowers their reliance on a single device. In addition, they get continuing revenue from their customers. That cuts their risk. Because of their diverse and steady revenue streams, wireless carriers also tend to be high dividend stocks.

This high dividend stock’s iPhone sales have hit a new high

In the current issue of Wall Street Stock Forecaster, our newsletter that focuses on the U.S. stock markets, we take a close look at AT&T (symbol T on New York).

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The company gets 48% of its revenue from its wireless division, which has 92.8 million customers nationwide. This high dividend stock’s traditional telephone operations, which serve 43.7 million consumers and businesses in 22 states, account for 47% of its revenue and earnings. The remaining 5% comes from other operations, such as selling ads in telephone directories.

AT&T sold a record 5.2 million iPhones in the third quarter of 2010. That’s up 61.6% from the second quarter. About 24% of these users are new customers for AT&T. Aside from the iPhone, the company is selling new smartphones from Samsung, Motorola and Research in Motion. Smartphones now account for 57.3% of AT&T’s long-term subscribers, up from 42.0% a year earlier.

AT&T is also making its networks faster and more reliable. Spending on wireless infrastructure rose 55% in the latest quarter. That will help it meet rising demand for wireless Internet access, and hang on to iPhone users after its deal with Apple expires.

New iPhone competitors likely

AT&T will probably lose its exclusive right to carry the iPhone when the contract expires in 2011. In the latest Wall Street Stock Forecaster, we’ll analyze the chances that the company’s network upgrades and new smartphone offerings will be enough to fend off competition from new iPhone carriers.

You can get our full analysis, including clear buy/sell/hold advice, on AT&T and 24 other U.S. stocks in the latest Wall Street Stock Forecaster. What’s more, you can get this issue absolutely free when you subscribe today. Click here to learn how.