Can Apple iPhone 5 Launch, Shipment, Sales Jolt U.S. Economy?
America’s sluggish economy: Look out! The Apple (NSDQ: AAPL) iPhone 5, set to debut Wednesday and ship on September 21, is coming to the rescue, or so says a new report from investment banker JP Morgan, as reported in a number of places including here and here. How is that possible? Here’s the details on yet another example of the sky-high iPhone 5 sales expectations:
In a note to clients, JP Morgan Chief Economist Michael Feroli wrote that if the iPhone 5 reaches 8 million in unit sales at a $400 trade margin ($600 average selling price less $200 for the cost of imported components), the U.S. gross domestic product (GDP) could be on the receiving end of up to a half a percentage point jolt. U.S. GDP advanced 1.7 percent in Q2, according to the U.S. Department of Commerce’s Bureau of Economic Analysis, so a .5 percent jump from one product alone rolled out at the tail end of a calendar quarter isn’t exactly chickenfeed.
Feroli wrote “sales of iPhone 5 could boost Q4 GDP by $3.2 billion, or $12.8 billion at an annual rate,” based on delivered products from recorded sales likely to begin in October. “This would boost annualized GDP growth in Q4 by 0.33%-point,” he wrote. Even Feroli acknowledged that the estimate at first glance “seems fairly large” and should be regarded with somewhat of a jaundiced eye.
Still, in comparing the iPhone 5’s projections to the iPhone 4’s sales, he noted that the device exceeded expectations. He said the Q3 to Q4 uptick in revenue derived from retail sales (if attributable to the iPhone) “would have added between .1 percent and .2 percent to Q4 growth.” Considering the iPhone 5 could easily eclipse the iPhone 4’s sales, the estimate could be “reasonable,” he said. If so, the rocket booster blast won’t just add to Apple’s bottom line but also might accomplish something public officials have so far been unable to achieve–shock the economy out of its doldrums.
Last week, Apple sent media invitations out for a 10 a.m. event at the Yerba Buena Center in San Francisco on September 12, ostensibly to debut the iPhone 5. Apparently, those that do such things will be counting the dollars not only for the vendor’s benefit but also for the good of the country.