The next generation iPhone 5, which Apple Inc. plans to release this week, could not only boost the tech giant’s bottom line – but could give a significant boost to the overall U.S. economy.<\/p>\n
Sales of the new iPhone could add between a quarter and a half percentage point to fourth quarter annualized growth in the U.S., according to J.P. Morgan’s chief economist, Michael Feroli in a note to clients on Monday.<\/p>\n
Such an impact would be significant.<\/p>\n
“Calculated using the so-called retail control method, sales of iPhone 5 could boost annualized GDP growth by $3.2 billion, or $12.8 billion at an annual rate,” Feroli wrote. That 0.33 percentage-point boost, he added, “would limit the downside risk to our Q4 GDP growth protection, which remains 2.0 percent.”<\/p>\n
Feroli laid out his math. J.P. Morgan’s analysts expect Apple to sell around 8 million iPhone 5s in the fourth quarter. They expect the sales price to be about $600.<\/p>\n
With about $200 in discounted import component costs, the government can factor in $400 per phone into its measure of gross domestic product for the fourth quarter.<\/p>\n
Feroli said the estimate of between a quarter to a half point of annualized GDP “seems fairly large, and for that reason should be treated skeptically.” But, he added, “we think the recent evidence is consistent with this projection.”<\/p>\n
Feroli said that when the last iPhone was launched in October 2011, sales significantly outperformed expectations.<\/p>\n
“Given the iPhone 5 launch is expected to be much larger, we think the estimate mentioned … is reasonable,” Feroli wrote.<\/p>\n
According to a recent Reuters poll of Wall Street dealers and economists, U.S. GDP was seen at 2.0 percent on average in 2013, down slightly from estimates this summer.<\/p>\n
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