Tech geeks and average consumers alike are quivering in anticipation of Appleâ€™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: â€œWe 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: â€œCan one little phone affect GDP?â€
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 â€œsignificantly outperformed expectations,â€ Feroli wrote. The iPhone 5 launch â€œis expected to be much larger.â€
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,â€ 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. The lift â€œwould limit the downside risk to our Q4 GDP growth projection, which remains 2%,â€ Feroli wrote.
â€œThis estimate seems fairly large, and for that reason should be treated skeptically,â€ Feroli said. â€œHowever, we think the recent evidence is consistent with this projection.â€
Last month, the government said U.S. economic growth in the second quarter expanded at an annual rate of 1.7 percent -- better than expected
but still the the slowest since last summer.
Consumer spending -- which according to conventional economic wisdom accounts for roughly 70% of GDP -- has been rising
and is projected to jump further for big-ticket items
via: Chicago Tribune