AT&T this afternoon said its third-quarter profit rose 4.9 percent over the same period a year ago, while churn remained essentially flat year-over-year and up only marginally over the second quarter. And the company added 363,000 contract customers during the quarter, more than doubling the 151,000 it signed on during the year-ago period.

As my colleague Kevin Fitchard points out, though, the latest earnings aren’t all good news. While the carrier has done a good job of converting feature phone owners into smartphone users (who represent a much more lucrative market), 75 percent of its contract customers now carry smartphones. That leaves little room for growth in that market unless AT&T can poach subscribers on other networks — a tough challenge considering how the smaller tier-ones are gaining traction there. And AT&T’s contract-subscriber adds pale compared to the 927,000 new subscribers Verizon reported last week.

But AT&T is doing a solid job of looking beyond smartphones as we begin to enter the era of the internet of things. It has make impressive strides in the admittedly slow market of cellular-connected tablets, and it recently stepped up its efforts by introducing low-cost plans for less-than-hardcore tablet users. And it is working to build on its early lead in the M2M market with the announcement of recent deals with GE and Tesla, among others. There’s a chance that AT&T is beginning to see the decline of its dominance as a provider of mobile phone services. But the carrier is doing a great job of looking beyond that traditional model to the next generation of mobile.