Jobs is a comeback story
The prophets of doom are out in full force. They are predicting that the recent earthquake, tsunami, and nuclear disasters will bring Japan to its knees. This will domino and affect the global supply chain. One analyst downgraded Apple Inc. because of this inevitable disruption. Look, Japan and Apple will both be fine.
Without question, the human toll in Japan is heartbreaking. But, societies are confronted with disasters and challenges time and time again and they always seem to make it through. Consider hurricane Katrina. Her devastation was immense. Many predicted that her effects would no doubt plunge the United States economy into a recession. They didn’t.
By how much might Japan’s disaster affect its gross domestic product? Might there be a 10-percent contraction? Keep in mind that the 2008/2009 recession saw the U.S. economy contract by slightly more than four percent. Will it lead to a recession in Japan that is two and a half times worse than the U.S. recession?
Let’s say Japan does experience a 10-percent contraction in its economy. As Japan represents about 8 percent of global gross domestic product, this would translate to 0.8 percent lower economic growth. Some predict global GDP growth in 2011 to be around 4.3 percent. So, that number is trimmed to 3.5 percent growth. Is this really the end of the world?
As a result of the disaster in Japan, one knuckle-headed analyst downgraded the growth outlook for Apple. Does this analyst really know what countries are in Apple’s supply chain? Anyone who tracks Macrumors.com will know this analyst is out of touch. Much of its supply chain is in fact in Taiwan and China, not Japan. With the addition of Verizon, we believe Apple will produce approximately 70 million iPhones in 2011. Apple won’t miss a beat. Steve Jobs will be proud.
