Trending Topics

iPhone 5 Sales Could Raise GDP

Tech geeks and average consumers alike are quivering in anticipation of Apple’s expected unveiling Wednesday of the iPhone 5.

Speculation is raging. Will the rumored smartphone kill the PC? Will it be affordable?

Or, as Twitter user Tanmay Bhat puts it: “We as the human race must collectively ask ourselves — Is our second kidney really that important?”

But analysts at J.P.Morgan have an even more intriguing question: “Can one little phone affect GDP?”

Chief economist Michael Feroli believes sales of the smartphone could potentially add as much as half a percentage point to annualized gross domestic product growth in the fourth quarter.

Roughly 8 million iPhone 5s will be sold over the period, even as sales of previous-generation iPhones stay steady, according to the report.

In October 2011, when the last iPhone debuted, sales “significantly outperformed expectations,” Feroli wrote. The iPhone 5 launch “is expected to be much larger.”

The phone will likely retail for around $600, based on its predecessors, Feroli wrote.

“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,” he wrote

IPhone 5 sales, according to Feroli, could boost GDP by $3.2 billion, or $12.8 billion at an annual rate, increasing fourth-quarter growth by a third of a percentage point…

Read more: Chicago Tribune

Back to top