The fifth version of the iPhone will give a much-needed boost to the US economy, say analysts.
According to JP Morgan Chief Economist Michael Feroli, in a note to clients titled ‘ Can one little phone impact GDP? ’, he estimates that once iPhone5 hits the stands, sales would go up between a quarter and half a percentage point. A percentage point is the arithmetic difference between two percentages.
Morgan’s equity analysts expect Apple to sell about 8 million iPhone5 units in the final three months of the year. Assuming that the phone is sold for $600, about 70 per cent or $400 per phone would figure into the government’s measure of GDP, says Feroli. This works out to a boost of about $3.2 billion in the fourth quarter or $12.8 billion annually.
This rise would help cushion the US economy from other risks in the final months of the year, he says in his report. Market watchers have been lowering growth projections for the year to 1.5 per cent and 1.4 per cent for the fourth quarter as the US economy faces threats such as high oil prices, fiscal cliff and a drought.
iPhone 4S, which was launched last October, sold four million units in the first three days. Feroli says that this will be even bigger, making his estimate ‘reasonable’.