Apple iPhone 5 Sales Could Boost United States GDP Significantly
The Apple iPhone 5 should be released this week if all goes all and analysts are now saying that it could help boost the U.S. economy in a measurable way. Sales of the new iPhone could add between a quarter and half a percentage point to annualized economic growth in the fourth quarter according to J.P. Morgans chief U.S. economist Michael Feroli. That could help to cushion the U.S. economy from other risks in the final months of the year. Who would have thought a single smartphone release could ever boost the U.S. economy that much?
J.P. Morgans equity analysts expect Apple to sell about 8 million iPhone 5 units in the final three months of the year. If the phone sells for around $600, with about $200 of it counted as imported components, then $400 per phone would figure into the governments measure of gross domestic product. (Even though consumers may not pay that much for the phone, because of subsidies from wireless carriers, Feroli explains that phone-selling companies often report the sales based on the price of the standalone product.) The bottom line: The new iPhone sales could boost GDP by $3.2 billion in the fourth quarter, or $12.8 billion at an annual rate. That is an increase of 0.33 percentage point in the annualized rate of GDP growth. It could be even higher, he says. Even a third of a percentage point would limit the downside risk to J.P. Morgans fourth-quarter growth projection of 2%.
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