iPhone 5 expected to boost U.S. GDP growth

Just how big is the iPhone? Bigger than you might think. Big enough that, according to a J.P. Morgan Chase research note quoted by the Wall Street Journal, the iPhone 5 is expected to boost the U.S.’s annualized GDP growth rate by 0.25 to 0.5 points in the fourth quarter. No, I’m not even kidding.

The research note was authored by J.P. Morgan Chase’s "chief U.S. economist," Michael Feroli. According to Feroli, the iPhone 5 could cost around $200 in parts and could sell for $600 without a subsidy, which would leave Apple with a trade margin of about $400 per phone. If eight million iPhone 5 handsets are sold in the fourth quarter… well, the math speaks for itself:

The new iPhone sales could boost GDP by $3.2 billion in the fourth quarter, or $12.8 billion at an annual rate. That is an increase of 0.33 percentage point in the annualized rate of GDP growth. It could be even higher, he says. Even a third of a percentage point would limit the risk the economy would grow more slowly than J.P. Morgan’s fourth-quarter growth projection of 2%.

Readers undeterred by financial jargon can check out Mr. Feroli’s full research note here.

The rest of us can shake our heads, mouth agape, at the outrageousness of it all. It’s no wonder gadget sites—and even major news outlets—post story after story covering the minutest leaks and most far-fetched speculation about upcoming iPhones. Apple gear is big business. Really big business.

Comments closed
    • danny e.
    • 7 years ago

    Samsung to sue over LTE in iPhone5. Unlikely, but it would be nice to see them force Apple to be unable to sell the iPhone 5 till the feature is removed.

    • Krogoth
    • 7 years ago

    [url<]http://www.youtube.com/watch?v=oI3DlIrvoHg[/url<] /thread

    • blaydes99
    • 7 years ago

    What’s ridiculous is that people know they are handing Apple a $400 margin on a $200 phone and still keep doing it, over and over. The Apple shower rape on the uneducated public continues.

    • albundy
    • 7 years ago

    nothing but a bunch of epeen bs! how does this boost anything but cr@pple’s bottom line? labor and probably even repair is all offshore (thanks republicans and lobbyists – vote quimby!). nothing stateside but sales and marketing.

    edit: should have read other posts before posting…lol

    • hans
    • 7 years ago

    “According to Feroli, the iPhone 5 could cost around $200 in parts and could sell for $600 without a subsidy, which would leave Apple with a trade margin of about $400 per phone. If eight million iPhone 5 handsets are sold in the fourth quarter”

    This assumes that all of the 8 million handsets are bought at full price. Don’t most people use their carrier’s upgrade discount? I’d be surprised if carriers pay the full retail cost on a phone. Then again, I wouldn’t be surprised if they only do for iPhones.

      • mcnabney
      • 7 years ago

      All iPhones are bought at full price….. by the carrier. I think the current 16GB iPhone 4S is sold to the carriers for between $600-650. The carriers absorb a massive subsidy for iPhones. That is why they would prefer you buy an Android – because even though they sell both devices for $200 with a contract, they pay a lot less for the ‘Droids.

    • echo_seven
    • 7 years ago

    Is anyone having trouble with the math?

    The note says that selling 8 (additional) million phones in a quarter, or 32 million in a year, would add $12.8 billion to our GDP for the year. The US annual GDP right now is just over $15 trillion. That’s only 0.08% isn’t it? What did I do wrong?

      • blastdoor
      • 7 years ago

      It is really hard to know. It could be that this person was assuming some kind of multiplier effects. But the whole exercise is questionable to say the least.

    • sweatshopking
    • 7 years ago

    with all the butthurt over the economy (we’ve done surprisingly well leaving out partisan politics!) i thought i’d tell a joke you’ve probably all heard;

    two economists are walking down a country road when they happen upon a cow patty. One economist says to the other “hey, tell you what, i’ll give you $10,000 to eat that!” the other guy hums and haws about it for a minute, then decides he’ll do it. After eating the cow crap, and collecting his 10 grand, he’s feeling pretty good. after a few minutes, the feeling starts to leave as he realizes he’s just eaten a large pile of waste. they continue on for a few minutes, until they come upon another cow patty. The second economist starts to figure it’d be pretty funny to see the first economist chow down, so he makes him a deal. “10k for YOU to eat that cow patty!!!” He hums and haws, then decides what the heck, so he also chows down. After collecting his money back, they both continue down the road, both feeling not that great. After a while one of the economists says “you know, here we are, both of us are in the same position we were an hour ago, only we’ve both eaten a cow patty!” “what?”, exclaims the other. “don’t be crazy!!! of course we’re better off! we’ve both been involved in $20,000 worth of trade!!!”

    • Xenolith
    • 7 years ago

    How many jobs will it add?

      • indeego
      • 7 years ago

      -1. And yes, I’m going to Hell.

        • dpaus
        • 7 years ago

        Save me a seat at the bar, OK?

          • sweatshopking
          • 7 years ago

          we can all kiss.

            • dpaus
            • 7 years ago

            It’s not that kind of bar, sweetie….

            EDIT: on second thought, if you’re a right-wing Christian, it probably is.

            • sweatshopking
            • 7 years ago

            i’m not, but we can kiss anyway.

            • NeelyCam
            • 7 years ago

            Is this Pulp Fiction “kiss it” stuff?

            • sweatshopking
            • 7 years ago

            no. it’s just regular old frenching.

            • NeelyCam
            • 7 years ago

            *bored*

    • Anarchist
    • 7 years ago

    An economy who’s GDP depends so heavily on people buying electronic gadgets can’t possibly be a healthy one.

    • corwin155
    • 7 years ago

    Foxconn under scrutiny again #thecircuit
    By Hayley Tsukayama

    Foxconn under scrutiny again: Foxconn, a Chinese company that manufacturers electronics for several prominent companies including Apple, is under scrutiny again after a New York Times report that the company is being accused of requiring vocational students to work at plants making components for Apple’s iPhone.

    The company’s latest iPhone is expected to be introduced Wednesday, and the report says that worker advocacy groups told the Times that students are being forced to work at the plants by their teachers.

    Apple has faced several waves of criticism over labor practices at Foxconn, ultimately prompting the company to join the Fair Labor Association and conduct audits of the factory conditions. The FLA looked at three Foxconn factories that make iPhone components and reported in June that Foxconn had revised its policies and procedures to limit the hours the interns work in the factories, and verified there were procedures in place to allow interns to join or leave the program freely. The FLA is continuing to look into the matter.

    [url<]http://www.washingtonpost.com/blogs/post-tech/post/foxconn-under-scrutiny-again-thecircuit/2012/09/11/4909ed64-fc17-11e1-b153-218509a954e1_blog.html[/url<] they are not free to leave the program they must complete the program to Graduate Boycott apple products

      • Bauxite
      • 7 years ago

      There is actually a law on the books for this that can be used to block all imports of goods made by forced labor…

    • Chrispy_
    • 7 years ago

    [quote<]iPhone 5 could cost around $200 in parts and could sell for $600 without a subsidy[/quote<] This is why people hate Apple. This is why people copy Apple. This is why people get angry when Apple stuff breaks. This is why Apple is the richest company on earth Damn, people are stupid.

    • strikeleader
    • 7 years ago

    And I suppose Obama will take credit for it.

      • NeelyCam
      • 7 years ago

      Was Romney against iPhone5 before he was for it?

        • dpaus
        • 7 years ago

        Never forget the Secret iPhone Vote!!

        signed,
        FatCat Veterans for Truth

    • anotherengineer
    • 7 years ago

    “iPhone 5 expected to boost CHINA’S GDP growth”

    fixed

      • Jigar
      • 7 years ago

      “iphone 5 production already boost China’s GDP growth”

      Refixed 🙂

    • corwin155
    • 7 years ago

    Boycott apple products

      • NeelyCam
      • 7 years ago

      Buy orange products instead

        • superjawes
        • 7 years ago

        I hear that juice is pretty good.

      • solo_clipper
      • 7 years ago

      Why do you hate merica?

        • corwin155
        • 7 years ago

        what does one have to do with the other ?
        apple while an American corp does not make anything in America
        apple uses slave labor in China , cause its legal there
        dont say well other companys doing it cause im not reading everyday what they are doing but i am reading what apple is doing everyday

    • dpaus
    • 7 years ago

    This is [i<][b<]not[/i<][/b<] a contribution to GDP, it is merely a contribution to Apple's bottom line. That's not the same thing. Gross Domestic Product is [url=http://en.wikipedia.org/wiki/Gdp<]the market value of all... [b<]final[/b<] goods and services produced within a country in a given period[/url<] (Wikipedia, emphasis mine). Apple's mark-up is not a 'final good or service'. A contribution to GDP requires that the $400 be a tangible good (it's not; the iPhone is unchanged after landing on our shores) or a valuable personal service. You [i<]could[/i<] argue that some part of it goes to the retailing of the product, but that would be a very, very small contribution. You could argue that some of it goes to support, but I don't think much of that is spent in the U.S. either. The $200 of materials is not a contribution to our economy, it is a contribution to China's (and Korea's and others') The $400 actually represents the draining of a massive amount of cash out of the hands of millions of American consumers and into the hands of several Chinese manufacturers and one American fashion retailer (I originally wrote 'gullible American consumers' but that's a matter of personal opinion, not accepted economic theory).

      • dpaus
      • 7 years ago

      ..and don’t get me started on those who likewise say that the billions p!ssed away on professional entertainers and athletes somehow helps our economy either. It doesn’t.

        • l33t-g4m3r
        • 7 years ago

        Bread and Circus. Placate the masses so they don’t get [url=https://www.youtube.com/watch?feature=player_embedded&v=i5dBZDSSky0<]wise[/url<] and revolt.

        • BobbinThreadbare
        • 7 years ago

        Movies and television stations employ a lot of people. I don’t see how that doesn’t help the economy.

        Also, clearly some of the $600 is going to R&D, marketing, and retail. Not much, but some of is helping the economy.

          • dpaus
          • 7 years ago

          I did say ‘entertainers and athletes’ – not support staff. And yeah, as I said, there’s clearly some portion of the $400 being spent on operating expenses, which [i<]are[/i<] a component of the GDP (as long as they're domestic, that is). But the notion that Apple's obscene mark-ups constitute a portion of the GDP sickens me. If that's true, then the fashion and perfume industry is the pillar of our economy.

      • Thatguy
      • 7 years ago

      Whoa, you just wait a minute there. You mean we can’t have an economy that produces nothing and continues to function properly? That doesn’t sound very American.

        • l33t-g4m3r
        • 7 years ago

        Yes we can. As long as failing businesses can continue to count on a bailout, and the federal reserve manipulates interest rates, which in turn manipulates the rest of the economy. Well, at least that will work until the rest of the world stops using the dollar as the world’s reserve currency, and then we turn into Greece.

      • Deanjo
      • 7 years ago

      So you are just arbitrarily removing private consumption from the GDP formula?

        • entropy13
        • 7 years ago

        Your disposable income has nothing to do with the iPhone 5. Whether or not you buy one, your disposable income (hence your private consumption) is the same.

        EDIT: LOL did you just -1 me, Deanjo?

        Whether you buy an iPhone 5 made in China or a car made in South Korea (i.e. they’re both not made in the US), the simple fact that you spent instead of saved the money adds to the US GDP. If you’re looking at the consumption side, which we are doing so right now. If you look at the production side, then it would be China (or South Korea if you buy that car) that will benefit and not the US, as anotherengineer (and Jigar) has already pointed out.

      • BoBzeBuilder
      • 7 years ago

      AMERIKAA. WE NUMBER ONE111!

      MOVE TO CHINA YOU COMMI.

      • mattthemuppet
      • 7 years ago

      That $200 also adds $1.6bn to the trade deficit too

        • NeelyCam
        • 7 years ago

        Buzzkill

          • mattthemuppet
          • 7 years ago

          sorry 🙂

    • oldDummy
    • 7 years ago

    [url<]http://krugman.blogs.nytimes.com/2012/09/11/broken-windows-and-the-iphone-5/[/url<] A better use of this destroyed capital model, IMO, would be to build roads, bridges and send money to local government agencies for increased employment. But an increase is an increase, whatever. EDIT: Ha, it's not an easy subject to discuss.

      • djgandy
      • 7 years ago

      Krugman, really?

      Once again he shows a Nobel prize is no indicator of intelligence. He doesn’t even understand the broken window fallacy. If people want iPhones then demand has not been artificially created, it is their own “free will” so to speak (let’s not get into a debate on free will, we will assume apple has not cracked the code of the human brain) to upgrade to a new phone with newer more advanced features, and it is after all technological advancements that drive economic growth.

      Also what use is building infrastructure? So people people can get to work? So they can sit and their desks, then design and develop software maybe, that runs on an iPhone? What new infrastructure needs to be built exactly aside from faster broadband networks, which ironically will be built because of new technological advancements from things like phones? Some new roads, railways, airports from time to time, or just some new roads for the sake of it?

      Sounds like more, lets spend $100bn on a project that has no demand just so 100,000 unskilled people can get a ‘job’, which of course lesson 5 in the school of Krugman. The guy is hilarious, he is actually shrugging his shoulders at discretionary demand!

        • sweatshopking
        • 7 years ago

        geez. if only him, a world renowned economist was as smart as djgandy on TR! you should go and tell his employers, so you can take his paycheque!

          • djgandy
          • 7 years ago

          Tell me sweatshopking, what is it he is renowned for, or do you just appeal to his nobel prize? His economics are reduced to money printing fixes everything (For him and his assert rich political friends anyway).

          Economics is as scientific as politics. It’s about convincing people your bullshit is the best bullshit.

            • sweatshopking
            • 7 years ago

            hardly. you want to debate monetary policy talk to l33t. i’m trying to behave.

            • shaq_mobile
            • 7 years ago

            fight, fight, fight, fight…

            • Kaleid
            • 7 years ago

            “Economics is as scientific as politics. It’s about convincing people your **** is the best ****”

            Yet the broken window example is hard science isn’t it?

      • trackerben
      • 7 years ago

      I’d be wary of Krugman. A systems thinker like Taleb is convinced that he is one of the most dangerous people in the world because influential partisans like him reach their epistemological limits well before their political limits. Or as Soros would say, he is too certain of things he doesn’t yet know that he doesn’t really know.

      [url<]http://articles.businessinsider.com/2010-04-14/wall_street/30087105_1_robust-society-paul-krugman-global-warming[/url<]

        • djgandy
        • 7 years ago

        Taleb is smart. He saw this mess coming along with others like Roubini, a mess created by the “GREAT” thinking that is behind most of what Krugman says. Taleb’s analysis is based on observations of financial markets and economic data, as opposed to Krugman whose analysis is based on observations of what kind of economic thinking is currently “in” and will get me more dinners with left wing politicians which he so adores.

        People like Krugman, what is it they do again except for kiss politicians asses?

        Also sometimes I just wonder if Krugman is a troll, I’ve read so many things by him that contradict his own beliefs. Or maybe he is just batsh*t crazy?

          • Kaleid
          • 7 years ago

          There are many old clips where we can see that he sees the disaster was coming..
          [url<]http://www.youtube.com/watch?v=qo4ExWEAl_k[/url<] Which asses does he kiss? You're making shit up, not even the dems listen to Krugman. He basically says that Obama is just better than team Rolls Royce who is just more Bush, or infact, even worse. "Taleb's analysis is based on observations of financial markets and economic data, as opposed to Krugman whose analysis is based on observations of what kind of economic thinking is currently "in"" You're makings chit up. Austerity is the norm in Europe and he hardly supports that now does he?

        • Kaleid
        • 7 years ago

        Influential? Few actually listen to him.

          • trackerben
          • 7 years ago

          I should hope so. Wasn’t it Krugman called for a “shock and awe” borrow-and-spend even larger than actual?
          [url<]http://krugman.blogs.nytimes.com/2009/02/04/shock-and-oy/[/url<] And to this day Mr. Krugman gripes that the Democrat stimus failed not because it was a questionable strategy but because Clinton's people "lost their nerve" and failed to support a Keynesian spending tsunami which would have conclusively shown government as the last, best hope for taming economic cycles. This is the type of chaotic brinkmanship which Taleb warns as magnifying risks and undermining robustness in complex systems.

            • oldDummy
            • 7 years ago

            With the cost of capital negative is when borrowing to create jobs has the biggest bang per buck.
            Common sense is wrong at the zero lower bound; that is what the GOP is trying to exploit to prevent a recovery.
            Don’t drink their Kool-Aid.

            • trackerben
            • 7 years ago

            If your capital pool is mostly derivative from a high internal savings and productivity growth or perhaps even some gracious externality (i.e. Marshall Plan) then you can always shape its buildup via flexible monetary and fiscal measures.

            But since much of your cheap capital derives from a temporal structural phenomenon which funnels global savings to you, you are assessed for your risky behavior by sovereign lending and credit agencies. And even more harshly by the bond and commodities markets, since you crowd out private recapitalization due to your borrowing demands on the financial markets. Markets which have become risk-averse due to the very uncertainties your taxing actions have introduced. And when risk aversion is the foreseeable optimum to the financial players who are the sovereigns’ favored phenomenon, no amount of stimulus will move the aspirational spirits moving those curves onto those regions of the economists’ maps which are associated with sustained demand and therefore capacity growth. The current bounds only serve to delineate a cyclically perverse, debt-driven trap. The way out of this is not to feed the hunger game, but to breakout back into old, good ground.

            So you may be still be The Superpower who alone can choose to softly, quantitatively, easefully devalue your future repayment streams. And even bluntly renege at some point by unilaterally resetting the world order on the might of your hard power. But you will be always be held accountable for the ways you are financing marginal growth to your private and public sector bases. Because you didn’t build it, you borrowed it.

            • oldDummy
            • 7 years ago

            Reality:
            We are in a depression.
            There is no demand.
            Business can’t sell when there is no market.
            We have to get people working in order to create demand.
            Fiscal spending should increase at times like this.
            Tightening should happen during a true, robust recovery.
            Not now.
            We are in a depression.
            Hoover showed what not to do in the 30’s.
            Have a good day.

            • Kaleid
            • 7 years ago

            The depression isn’t there for the rich though. They are doing amazingly well.

            • trackerben
            • 7 years ago

            Again, we have a structural problem which continues because the underlying fiscal and political issues remain. Monetary policy which brings inflationary pressures to commodities worldwide is not a smart fix for what are essentially ailment of domestic origins, the usual known burden of poor governance and policy on private productivity gains.

            Corrupt governing elites and their capturing interests in Washington have brought about inordinately oppressive taxation and regulation which suppresses productive investment capital almost as much as rent-seeking quick money. The corrupted system slows productivity growth and stunts the formation and evolution of competitive new industries. But the worst part is that the government and its beneficiaries do not learn collectively because the availability of easy funding does not force decisive macroeconomic response.

            The true engine of the economy and source of continued virtuous growth in all its cyclic aspects is found in the private sector, in particular the many small- and medium-sized business who represent 80-90% of commercial payrolls. So long as they have difficulty securing funds and the tax and regulatory breaks which the big “bail-out ready” firms enjoy by virtue of crony-capitalist channels with the Capital elites, these struggling small firms are not going to readily expand and invest and hire more people and/or start new ventures when the environment was made so hostile to risk-taking and rapid reinvestment found in spirited new business activity.

            Printing money does temporarily tide over the megabanks which are the government’s partner conduits for continued borrowings from foreign institutions. But this can be kicked down the road for only so long before the consequences of low productivity and imbalanced flows in the real economy come and reign over all considerations.

            This report lays out the point I was going to make about stimulus being somewhat akin to prescribing a sugar fix for a raging infection:
            [url<]http://www.forexlive.com/blog/2012/09/13/egan-jones-analyst-hints-at-us-rating-downgrade-post-qe3/[/url<]

            • Kaleid
            • 7 years ago

            Sigh. USA has dealt with its economic woes better than Europe, which chose austerity.

            CBO states that millions of jobs were saved. Even during the savings and loans scandal the errors were fixed with bailouts.

            For years Krugman has said that the chosen road are the wrong ones. The tax cuts by Bush for instance did very little according to him.

            “Almost all of the stimulative effect of tax cuts,” Zidar found, “results from tax cuts for the bottom 90 percent. A one percent of GDP tax cut for the bottom 90 percent results in 2.7 percentage points of GDP growth over a two-year period. The corresponding estimate for the top 10 percent is 0.13 percentage points and is insignificant statistically.”
            [url<]http://blogs.reuters.com/taxbreak/2012/09/12/which-tax-cuts-stimulate-the-economy/[/url<] New Study Finds High-Income Tax Cuts Don’t Stimulate Economic Growth [url<]http://thinkprogress.org/economy/2012/09/12/840641/tax-cuts-rich-economic-growth/?mobile=nc[/url<] [url<]http://www.epi.org/page/-/EPI_PolicyMemorandum_184.pdf?nocdn=1[/url<] NASDAQ Closes At Highest Level Since 2000 [url<]http://www.huffingtonpost.com/2012/09/06/sp-500-ecb-europe-stocks-nasdaq_n_1862256.html[/url<] Highest since 2000? How could that possibly be by that socialist president? Here's why it doesn't trickle down.. Corporate Profits Rising At Expense Of Hiring, Report Says [url<]http://www.huffingtonpost.com/2012/05/04/corporate-profits-jobs-investment_n_1478340.html[/url<] Since 2009, 88 Percent Of Income Growth Went To Corporate Profits, Just One Percent Went To Wages [url<]http://thinkprogress.org/economy/2011/06/30/258388/corporate-profits-recovery/[/url<] Major U.S. Corporations Squeezing Even More Money Out Of Employees [url<]http://www.huffingtonpost.com/2012/04/09/revenue-per-employee_n_1412293.html[/url<] Election 2012: Obama Holds Double-Digit Lead Over Romney With Global Investors, Poll Finds [url<]http://www.huffingtonpost.com/2012/05/11/obama-investors-poll_n_1508429.html[/url<] Private Jobs Increase More With Democrats in White House [url<]http://www.bloomberg.com/news/2012-05-08/private-jobs-increase-more-with-democrats-in-white-house.html[/url<] FUN FOR THE 1%: Top Earners Took In 93% Of Income Growth In 2010 Richest 1 Percent Account For Nearly All Of U.S. Recovery's Gains: Report [url<]http://www.huffingtonpost.com/2012/03/05/1-percent-income-inequality_n_1321008.html[/url<] The Rich Are Now Richer Than Before The 2008 Credit Meltdown [url<]http://blogs.forbes.com/stevenbertoni/2011/07/12/the-rich-are-now-richer-than-before-the-2008-credit-meltdown/[/url<]

            • trackerben
            • 7 years ago

            See my post to oldDummy.

            And remember, the biggest group of losers in the housing/lending debacle was that half of the home-owning middle class who saw their portfolio wealth drop by 30-50% and their mortgages go underwater, a category who were until recently pegged by peoples everywhere as the wealthiest and yet most secure class of households on Earth. This huge belt of propertied middle class is from where most entrepreneurs, professionals, educators, and skilled workers arise. And yet in the divisive context of US racial and special-interest politics, this group is the one which populist demagogues in both parties would burden the most in the interests of what they define politically as the middle class.

            The main reason more members of this massive group aren’t in the streets is due to the fact that most “own” houses which may still appreciate in a future aspirational economy. This situation by itself is an artifact of the unprecedented nominal doubling of GDP during the Bush years from 9 to an immense 19 $Trillion (unadjusted), before the financial crisis ended with some 5 $Trillion wiped off the books, but with the legacy of the longest economic expansion in history waiting to be rediscovered.

            There is still so much remaining potential of so much laid-off and idled industrial workforce and capacity. The wealthiest households may enjoy holding more than 90% of national financial assets, but they do not enjoy 90% of the happiness out there. Famous third-world economists observe that most of the American upper class tend to be new generation producers and risk-takers who prefer to productively reinvest their capital within US borders.

            This is a decisive advantage, it always has been and always will be, if conditions are made right for bringing opportunities before the most number of takers. Just stimulating the banks with monies which will be mostly reinvested right back in Treasuries or inefficient public-sector projects is not enough of incentives or conditions to spark small businessmen into trying new ventures or convince firms holding huge amounts of cash to allocate more for expansion and inventories. There are so many people of all classes and backgrounds just waiting for the right sparks to ignite and launch another series of booms built on entire new industries and ideas.

            It is only recently due to oppressive taxation and regulations that substantial numbers of richer Americans have learned to transfer their funds and investment sentiments abroad or to even renounce citizenship – the classic signs of an increasingly burdensome and confiscatory system of governance.

            • oldDummy
            • 7 years ago

            I hope you’re being paid to be this wrong,
            Otherwise, I’m surprised you’re capable of typing and breathing concurrently.

            • trackerben
            • 7 years ago

            [quote<]I hope you’re being paid to be this wrong...[/quote<] I would like to be wrong and yet be paid no matter what. But the data argue against it. Why do the big corporates report record earnings, and yet keep so much cash on hand? Why so low a bounce in real estate values with mortgage rates approach zero? Most SBE businesses have difficulties securing loans, why not the US government? Why aren't most state-backed entitlements being declared insolvent when so many private sector pensions are? Why are so many US investors concerned about current prospects while most foreign investors would like to keep things as they are? [quote<]...Otherwise, I'm surprised you’re capable of typing and breathing concurrently.[/quote<] I can also chew gum and send messages on my phone at the same time. Yes, that isn't going to impress.

      • oldDummy
      • 7 years ago

      Krugman is a liberal and wears that on his sleeve.
      If you can get over that:
      His models have forecast just about everything that has happened. This is due to following Keynes’s who did extensive work regarding depression economics.
      Without getting too crazy about it: when real interest rates are negative normal “rules” don’t work. The “trick” is realizing that we are in a depression.
      Why listen to people that are/were wrong about the economy and continue to shoehorn reality into their models? Their agenda has preference over the facts.

    • glacius555
    • 7 years ago

    Hmm.. Wonder how many percentage points it could be if Samsung’s Galaxy S3 that is outselling the iPhone was included as extra iPhones sold?

    /sarcasm

    • lilbuddhaman
    • 7 years ago

    How can a huge number of people paying a company hundreds of dollars (at a huge margins) for something they don’t need, be helping the economy?

    Apple isn’t creating jobs, spending money, or “trickling down” in the US.

    please show me where I’m wrong in this assumption…but I don’t see this as a good thing for our economy as a whole.

      • glacius555
      • 7 years ago

      But it is!

      I bet there is a whole army of copyists, busy adopting revolutionary “rectangular phone with a big screen” idea in ways most magical, and another army ready to sue them, and yet another one to cover the story?

        • A_Pickle
        • 7 years ago

        [quote<]I bet there is a whole army of copyists...[/quote<] Well there's your problem: Those fellas are being employed in China.

      • indeego
      • 7 years ago

      In theory it can make people more productive at what they do anyway, which gives them more time to pay for things/do more things that spurs the economy.

      This also has the same potential to just put as many people out of work. For example, who buys dedicated GPS devices or paper maps anymore?

        • Noigel
        • 7 years ago

        Why, I buy dedicated GPS devices. I like my phone being a phone and my GPS being dedicated to GPSing.

        For the record, I don’t own a smart phone and am sad that the world has abandoned dumb phones, I also think cellphones companies secretly hate my demographic.

        I am legend.

          • indeego
          • 7 years ago

          I did too, until I stopped using my cell for phone calls, and my GPS device was never on me and came with far fewer features than my cell.

        • A_Pickle
        • 7 years ago

        Dedicated GPS devices, not so much — paper maps? Definitely. Not many, though, just for really remote areas that I frequent that I’d like to have good, solid backups for.

        • xeridea
        • 7 years ago

        No one buys iPhones to be productive. They buy them because they are shiny. If someone wanted to be productive on the go, they would buy a laptop… which unfortunately has a 99% chance of a crappy screen, but is still more productive.

      • NeelyCam
      • 7 years ago

      Samsung is building a fab in the USA to supply parts to Apple phones. That most certainly creates US jobs

        • lilbuddhaman
        • 7 years ago

        [quote<]Most of the company's additional spending in Austin this year will be for equipment going into the newest part of the factory complex. The additional equipment, however, probably won't result in a significant number of new jobs. Morse said she expects Samsung's local employment to "remain fairly steady" at about 2,400 employees.[/quote<]

          • NeelyCam
          • 7 years ago

          Ok, I was wrong – thanks for the correction. I didn’t know Samsung already had a fab in the US..

      • LocalCitizen
      • 7 years ago

      economics and accounting are systems created by people who can’t handle math at the math / comp sci / engineering level.

        • Beelzebubba9
        • 7 years ago

        Bwuhahahaha.

        Oh nerds….

      • djgandy
      • 7 years ago

      It’s actually good, the problem is that people won’t be buying them with their own hard earned cash, but money they borrowed so they can keep playing “pretend I am rich”.

      • Firestarter
      • 7 years ago

      Well it’s marginally better than if you’d buy a Samsung phone or something, because a larger portion of the money raked in by Apple would be spent in the USA, by the engineers and management etc. who are on Apple’s payroll.

      Or, maybe that’s more dependant on where the majority of the shareholders reside, how much dividend they get and how they spend it, I don’t know.

      • LaChupacabra
      • 7 years ago

      This isn’t trickle down economics and Apple’s profit margins aren’t ridiculous. People assume that Apple sees the end price of 650 dollars, or whatever the price of an unsubsidized phone is. That simply isn’t true.

      To put this into some context, AAPL in the 52 weeks ending 2011-09-24 did 108,249,000 in revenue with gross profit of 43,818,000 (according to finance.google.com). MSFT in the 52 ending 2012-06-30 did 73,723,000 in revenue with gross profit of 56,193,000. That is an oversimplification of what the cost of doing business is, but saying Apple being the financial juggernaut that it is is bad for the economy is just plain uninformed and borderline moronic.

      *Edit: Grammar

        • lilbuddhaman
        • 7 years ago

        1. yes their margins are ridiculous
        2. no one here assumed they got the entire $X sale price of the device
        3. your numbers don’t illustrate anything pertaining to my comment or whether this is good or bad for the economy.

        4. and finally, *any* entity being a “financial juggernaut” is bad for an economy. If more and more $ is pooled into one entity, then it hinges on that entity to redistribute that $ by some means. If that entity does what Apple has been doing, which is NOT spending that money, and/or a large amount of what they DO spend is spent overseas, then it is “just plain uninformed and borderline moronic” to say that it ISN’T hurting the economy.

      • End User
      • 7 years ago

      [quote<]Apple isn't creating jobs, spending money, or "trickling down" in the US.[/quote<] 47,000 Apple employees in the US 300,000 to 400,000 indirect jobs Apple is about to build a massive HQ building in Cupertino [url<]http://goo.gl/f2rT4[/url<] Apple recently spent $1 billion on a data centre in North Carolina Feel free to browse their US job site [url<]http://www.apple.com/jobs/us/corporate.html[/url<]

        • lilbuddhaman
        • 7 years ago

        1. That $1 billion data center in NC created ~50 permanent jobs, being built after NC legislature provided them with a $47 million tax break. What a deal.

        2. Those 300k-400k “indirect” jobs number you pulled from Apple’s “job creation” site assumes that those jobs would not exist without their presence.

        3. The original statement I made was meant to be a broad one, a shorter way of saying “Apple is spending similar amounts as other companies, but in correlation to the amount they are bringing in, it is far less, and that difference is not showing up in the US economy. It is either sitting in their coffers or going overseas.”

          • End User
          • 7 years ago

          1) Did it appear by magic? No. American workers/businesses built it.

          2) I went low on the numbers and did not source them from Apple. Apple claims 514,000.

          [quote<]University of California, Berkeley economist Enrico Moretti has written a book about this kind of indirect job creation. He says Apple's total job creation estimate is too high — the real total is somewhere between 300,000 and 400,000.[/quote<] 3) US companies are waiting on tax reforms before they bring their money back to the US [url<]http://goo.gl/1j5oh[/url<] Apple has a big war chest. With their history I'm not surprised.

            • A_Pickle
            • 7 years ago

            1.) It doesn’t matter how it appeared, or was built – it created 50 jobs. Fifty. That’s crap. That won’t make a dent in the unemployment rate.

            2.) Continuing to assume the jobs wouldn’t exist without Apple…

            3.) Glad to know End User knows what multinational businesses plan to do with their money. Without a citation, I might add – whew! He’s good.

            • End User
            • 7 years ago

            1) They contributed $1 billion to the US economy. That has an impact.

            2) If those jobs exist without Apple then they most probably exist with Apple. Apple adds an additional 300,000 to 400,000 jobs to the US economy.

            3) You are SSK good.

            • sweatshopking
            • 7 years ago

            [quote<] 3) You are SSK good.[/quote<] i assume you mean he's correct? if you're arguing that apple creates jobs, fine. but it sounds like he's right about the 50 for the data centre. that's still 50 jobs.

    • Shouefref
    • 7 years ago

    I didn’t know US economy is so weak that a [i<]phone[/i<] could boost it.

      • Beelzebubba9
      • 7 years ago

      You forget that the iPhone as a single product generated more revenue for Apple than Intel or Microsoft have as companies in the last quarter (or maybe two). If the iPhone 5 has a baseband that allows broader carrier support and greater penetration into the Chinese market, then that gap will only widen.

      Say what you will about Apple or the iPhone, but this is probably the biggest launch of any commercial product in any market this year.

        • superjawes
        • 7 years ago

        [quote<]Say what you will about Apple or the iPhone, but this is probably the biggest launch of any commercial product in any market this year.[/quote<]Even if that is true, they would have to ressurect Steve Jobs to live up to the iPhone's hype.

          • trackerben
          • 7 years ago

          Ressurect Jobs to ressurect more jobs? Oy. What is good for Apple is good for the nation…

            • superjawes
            • 7 years ago

            Hey, if it works, you’re sure to see attempted ressurections of Johnny Cash and Bob Hope.

            • trackerben
            • 7 years ago

            Steve Jobs is dead. Bob Hope is dead. Johnny Cash is dead. And now we have no Jobs, no Hope, and no Cash…

            But hey, we have Gore!

            ______________________________________________________________
            Just imagine how Gore must sound like at Apple board meetings. A fantasy:

            (Impassioned Gore) “The consensus is settled! The deniers can say all they want. But we all know that if left unchecked, the increasing distance of Apple from Job’s hand in time could only lead to drastic falls in revenues, losses in mindshare, and yes, a hit to even my image! I point out these conclusions are not mine, but those of a vast majority of analysts. So let’s focus on the one thing which matters, attracting and keeping people profitably on our platform vs all the others, no matter what.”

            “We need people to see the dire necessity of increasing that share of their disposable income which they already dedicate to our best ideas. That contributing to the noble defense of our shared way of life is personally rewarding. We must show that this is not an economic issue, this is a moral issue. If we stick to such personable messaging, our customers are going to be demanding this.”

            (Turns to point at the overhead screen where Steve’s Job’s black-turtlenecked visage appears, tinkering with a photoshop of an <iPhone 5> on a sleek white table)

            “From now on, I propose that every new product be marketed as Steve’s last, his final baby, his signature project. I propose for all lock screens to permanently feature this evolving image of my friend, along with the bold caption “After me, the Deluge!”

            • entropy13
            • 7 years ago

            [quote<]Steve Jobs is dead. Bob Hope is dead. Johnny Cash is dead. And now we have no Jobs, no Hope, and no Cash...[/quote<] Kevin Bacon is still alive.

            • trackerben
            • 7 years ago

            Buy this item?
            Yes<click>

            “Mmmmmmm… Delicious!”

            Done eating? We have Tom Cruise!

          • ludi
          • 7 years ago

          In the iPhone 5, there’s an app for that.

      • NeelyCam
      • 7 years ago

      reply fail..

    • Arvald
    • 7 years ago

    Logic on this is fine but a large boost is also likely be the accessories that the new doc connector will drive…
    everyone who buys one will buy 2-3 accessories…

    <edit to change a typo>

      • NeelyCam
      • 7 years ago

      Yeah, and 90% of that revenue ends up in China

        • LocalCitizen
        • 7 years ago

        no, at least 50% of the price you pay is at the retail level. manufacturing is < 20%

          • NeelyCam
          • 7 years ago

          Sure, but since a lot of those companies are chinese, they get most of the retail margin as well

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