With Apple Inc. (NASDAQ:AAPL)’s newest iPhones (iPhone 6 and iPhone 6 Plus) the company has found itself actually adding significantly to the GDP and also moving the stock market.
Speaking with the New York Times recently, Michael Feroli, the chief United States economist for JPMorgan Chase said, “The iPhone is having a measurable impact. “It’s a little gadget, but it costs a lot and it seems that everybody has one. When you do the multiplication, it’s going to matter.”
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He made the following remarks before saying that the two phones, by themselves, will represent a .25% to .33% addition to the growth rate of the United States’ gross domestic product.
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Tim Cook, Apple’s CEO seems to agree and told analysts last week that the company was expecting the next quarter to be “incredibly strong” given the fact that Apple can’t make its phones fast enough. “These iPhones are the best we have ever created and customers absolutely love them,” he added.
In a recent regulatory filing, Apple said that it has been selling its phones for an average of $603 when you factor in the service agreements that customers reach with their preferred carriers. Given the fact that it costs Apple roughly $200 per phone and the millions upon tens of millions it sells, it becomes quite clear why the company is sitting on a mountain of cash.
“Apple is now so big that it takes a lot to make it grow appreciably,” said Andrew Rassweiler, senior director for cost benchmarking services, at IHS Technology to the New York Times.“The iPhone is the core of Apple right now,” he said.
The iPhone 6 is also boosting the economies of East Asia where it is manufactured.
“It’s not like G.M. having a great quarter,” Mr. Feroli said. “It doesn’t translate directly into employment in the United States. It’s a more complex world today, and, in that sense, Apple is representative of that world.” However, Feroli points out that Apple does affect where people spend their money pointing to 3.4% jump in consumer electronics sales in the month that the new phones were unveiled and a 1.2% drop in clothing sales.
“People are buying iPhones, partly as a status symbol,” Mr. Feroli said. “They’re not buying as much clothing.”
Additionally, while you may not hold Apple shares of your own, if you have a 401(k) account, there is a good chance that you hold Apple Inc. (NASDAQ:AAPL) shares indirectly another way that the iPhone affects the economy as a whole.