Apple's iPhone 5 Sales Could Add Half a Point to GDP
Sales of Apple’s iPhone 5 could add as much as half a percentage point to U.S. fourth-quarter annualized GDP, according to JPMorgan, underscoring the ubiquitous tech company’s unprecedented influence on one country’s economy.
“We believe the release of iPhone 5 could potentially add between ¼ to ½%-point to fourth quarter annualized GDP growth,” said JPMorgan’s Michael Feroli in a note to clients. “Sales of iPhone 5 could boost Q4 GDP by $3.2 billion, or $12.8 billion at an annual rate.”
The firm’s Apple analyst estimates fourth quarter sales of 8 million units of the new iPhone, which is set to be unveiled this Wednesday. Feroli calculated his economic impact by using a $600 average selling price minus $200 in costs of foreign components, as imports subtract from GDP.
“Does that mean an iPhone 10 will add 1 percent one day?” asked Short Hills Capital’s Stephen Weiss ironically.
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Shares of Apple are up 18 percent in three months in anticipation of the new phone. A 70 percent increase this year has made it the most valuable company ever with a market capitalization of $637.9 billion.
By John Melloy, "Fast Money" Executive Producer, CNBC, with reporting by Jesse Bergman.
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