iPhone 5 can significantly lift US economy: JP Morgan

[Markus]

iPhone 5 can significantly lift US economy: JP Morgan​

According to JP Morgan's analysis, the sales of Apple’s yet to be released iPhone 5 may give significant boost to the US Economy.

“Sales of the new iPhone could add between a quarter and a half percentage point to fourth quarter annualized growth in the US”, said JP Morgan's chief economist, Michael Feroli in a note to clients on Monday.

According to reports, Apple, on Sept. 12, will announce a new version of the iPhone that features a bigger screen and compatibility with faster next-generation wireless networks.

He said that sales of iPhone 5 could boost annualized GDP growth by $3.2 billion, or $12.8 billion at an annual rate.

Feroli said there’s precedent for Apple’s handset boosting the economy. After the iPhone 4S was introduced last year, overall U.S. retail sales “significantly outperformed expectations,” bringing as much as two-tenths of a percentage point boost to GDP growth, he said.

Here is full text of note:

We believe the release of iPhone 5 could potentially add between 1/4 to 1/2%-point to fourth quarter annualized GDP growth. Our equity analysts believe around 8 million iPhone 5's will be sold in the US in Q4, even while sales of previous generation iPhones are maintained at a solid pace. While we have no idea how much these will retail for, if it is similar to previous launches it would be around $600. Likewise, if the imported cost component is similar to previous leading generation phones it would imply around a $200 per phone addition to imports (which is a subtraction from GDP). The difference between these two figures, $400, would represent the trade margins, which figure into GDP.

Thus, calculated using the so-called retail control method, sales of iPhone 5 could boost Q4 GDP by $3.2 billion, or $12.8 billion at an annual rate. This would boost annualized GDP growth in Q4 by 0.33%-point. If hedonically-adjusted constant quality prices of phones declined due to newer or better features -- a reasonable conjecture then the lift would be even greater, though past iPhone releases don't bear a visible impact on the relevant CPI components. The third of a percentage point lift would limit the downside risk to our Q4 GDP growth projection, which remains 2.0%.

This estimate seems fairly large, and for that reason should be treated skeptically. However, we think the recent evidence is consistent with this projection. The last iPhone launch was at a similar time last year. In October of last year, when the iPhone 4s first became widely available, overall retail sales that month significantly outperformed expectations. Essentially all iPhone sales occur either on-line or in retail stores. Over half of the 0.8% increase in core retail sales last October occurred in two categories: on-line sales and computer and software sales, which combined had their largest monthly increase on record. The incremental growth of Q4 sales at those stores over Q3, if due to the iPhone, would have added between 0.1% to 0.2%-point to Q4 growth, after subtracting the import drag. Given the iPhone 5 launch is expected to be much larger, we think the estimate mentioned in the first paragraph is reasonable.

Out-of-pocket retail prices may be lower if bundled with service plans, with wireless networks often absorbing around a $350 subsidy. The phone-selling companies often report such sales as the best estimate of what the product would sell for on a stand-alone basis. Census officials averred that such was likely how bundled phone sales are reported to them in the retail sales survey.

Account needs to also be made for changes in inventories, but we believe that Q3 and Q4 end-of-period iPhone 5 inventories will be very lean, implying little addition or subtraction to GDP.

iPhone 5's may start retailing in late September. However, the general principle in the retail sales report is that sales should be recorded when the product is delivered, which in the case of iPhone 5 is more likely in October.

iPhone 5 can significantly lift US economy: JP Morgan

 

[OrionHunter]

So now the great trillion dollar American economy has come down to depend on a darn iPhone to bail it out? Jeeez! What next?

 

[Hyperion]

So now the great trillion dollar American economy has come down to depend on a darn iPhone to bail it out? Jeeez! What next?

Chupp!

Long live Apple

 

[FRANCIS]

Fed up with apples product

 

[Rhino]

HTC and samsung are already planning to sue apple's Iphone 5.. Trouble for iPhone 5? Samsung to sue, HTC wants it banned | Firstposthttp://timesofindia.indiatimes.com/tech/news/hardware/iPhone-5-HTC-Samsung-to-sue-Apple/articleshow/16348450.cms

 

[FRANCIS]

If this is the iPhone 5, it Could Flop - Forbes

 

[Al Bhatti]

Pakistan should launch it's own brand "Mango"

 

[chauism]

iPhone 5 can significantly lift US economy: JP Morgan​

According to JP Morgan's analysis, the sales of Apple’s yet to be released iPhone 5 may give significant boost to the US Economy.

“Sales of the new iPhone could add between a quarter and a half percentage point to fourth quarter annualized growth in the US”, said JP Morgan's chief economist, Michael Feroli in a note to clients on Monday.

According to reports, Apple, on Sept. 12, will announce a new version of the iPhone that features a bigger screen and compatibility with faster next-generation wireless networks.

He said that sales of iPhone 5 could boost annualized GDP growth by $3.2 billion, or $12.8 billion at an annual rate.

Feroli said there’s precedent for Apple’s handset boosting the economy. After the iPhone 4S was introduced last year, overall U.S. retail sales “significantly outperformed expectations,” bringing as much as two-tenths of a percentage point boost to GDP growth, he said.

Here is full text of note:

We believe the release of iPhone 5 could potentially add between 1/4 to 1/2%-point to fourth quarter annualized GDP growth. Our equity analysts believe around 8 million iPhone 5's will be sold in the US in Q4, even while sales of previous generation iPhones are maintained at a solid pace. While we have no idea how much these will retail for, if it is similar to previous launches it would be around $600. Likewise, if the imported cost component is similar to previous leading generation phones it would imply around a $200 per phone addition to imports (which is a subtraction from GDP). The difference between these two figures, $400, would represent the trade margins, which figure into GDP.

Thus, calculated using the so-called retail control method, sales of iPhone 5 could boost Q4 GDP by $3.2 billion, or $12.8 billion at an annual rate. This would boost annualized GDP growth in Q4 by 0.33%-point. If hedonically-adjusted constant quality prices of phones declined due to newer or better features -- a reasonable conjecture then the lift would be even greater, though past iPhone releases don't bear a visible impact on the relevant CPI components. The third of a percentage point lift would limit the downside risk to our Q4 GDP growth projection, which remains 2.0%.

This estimate seems fairly large, and for that reason should be treated skeptically. However, we think the recent evidence is consistent with this projection. The last iPhone launch was at a similar time last year. In October of last year, when the iPhone 4s first became widely available, overall retail sales that month significantly outperformed expectations. Essentially all iPhone sales occur either on-line or in retail stores. Over half of the 0.8% increase in core retail sales last October occurred in two categories: on-line sales and computer and software sales, which combined had their largest monthly increase on record. The incremental growth of Q4 sales at those stores over Q3, if due to the iPhone, would have added between 0.1% to 0.2%-point to Q4 growth, after subtracting the import drag. Given the iPhone 5 launch is expected to be much larger, we think the estimate mentioned in the first paragraph is reasonable.

Out-of-pocket retail prices may be lower if bundled with service plans, with wireless networks often absorbing around a $350 subsidy. The phone-selling companies often report such sales as the best estimate of what the product would sell for on a stand-alone basis. Census officials averred that such was likely how bundled phone sales are reported to them in the retail sales survey.

Account needs to also be made for changes in inventories, but we believe that Q3 and Q4 end-of-period iPhone 5 inventories will be very lean, implying little addition or subtraction to GDP.

iPhone 5's may start retailing in late September. However, the general principle in the retail sales report is that sales should be recorded when the product is delivered, which in the case of iPhone 5 is more likely in October.

iPhone 5 can significantly lift US economy: JP Morgan

So 12.8 billion USD is all it takes to lift US economy? Don't forget that that figuare also include those people who are going to buy a new phone regardless whether IPhone 5 is out or not.

 

[shelly]

i hop my trusted nokia 6610 for last 9 years. great it is

 

[Kompromat]

Rest from Afghanistan's 61% increase of heroine output?

 

[VCheng]

Rest from Afghanistan's 61% increase of heroine output?

No, most of that goes to Afghan neighbors I think.