By Mike Mulvihill (@Mike_Mulvihill)
Apple is famous for its highly effective new product intro hype. But here’s a new twist for the iPhone 5 due out later this week. According to J.P. Morgan Chase & Co.’s chief U.S. economist Michael Feroli sales of the new iPhone could add between a quarter and a half of a percentage point to the annualized rate of economic growth in the fourth quarter.
J.P. Morgan’s equity analysts expect Apple to sell about eight million new iPhone units in the final three months of 2012 which could boost GDP by $3.2 billion in the fourth quarter ($12.8 billion at an annual rate). That amounts to an 0.33 percentage point rise in the annualized rate of GDP growth. And get this, Feroli says it could be even higher. In this fragile economy, even this third of a percentage point would limit the risk the economy would grow more slowly than the 2 percent forecast for the fourth-quarter.
Thanks Steve Jobs, Apple’s ghost of Christmases yet to come.
It is remarkable that one product can affect an entire economy. And while most innovations won’t show up on the GDP to this extent, collectively, innovating with products and services is the best tool we have to bring new life to our aging economy.