While most analysts are expecting the new iPhone to provide a big boost to Apple’s bottom line, JP Morgan Chase’s economics team thinks it’ll have a MUCH bigger impact.
Chief U.S. economist Michael Feroli says sales of the latest version of Apple’s smartphone could add a quarter to half a percentage point to fourth-quarter annualized growth in the U.S.
“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,” Feroli writes in a research note.
Using a $600 price point, which would be similar to previous iPhone launches, the device would have a trade margin of $400 — Adjusting for the $200 per phone in imports, a subtraction to GDP – which figures into economic growth statistics.
Using those calculations, the sales of iPhone 5’s could boost annualized GDP growth by $3.2 billion, says Feroli, or $12.8 billion at an annual rate. That 0.33%-point boost “would limit the downside risk to our Q4 GDP growth projection, which remains 2.0%.”
Feroli admits that the figure seems “eye-popping” and says for that reason it should be treated skeptically.