The new Apple iPhone is being unveiled Wednesday and at least one Wall Street analyst thinks it could provide a much-needed boost for the U.S. economy.
Michael Feroli of J.P. Morgan estimates iPhone sales could bump up the annualized U.S. gross domestic product by $3.2 billion in the fourth quarter or 0.33 of a percentage point. Over the next year, he thinks sales could hit $12.8 billion.
“The third of a percentage point lift would limit the downside risk to our Q4 GDP growth projection, which remains 2 percent,” wrote Feroli in his analyst’s note.
His forecast assumes Apple will sell 8 million new iPhones in the fourth quarter while maintaining sales of previous models at their existing rates.
Sales forecasts for iPhone sales by Apple industry watchers have been rising as the launch date nears.
Gene Munster of Piper Jaffray told CNET he thinks Apple could sell as many as 10 million iPhones in the U.S. in September alone. Brian White of Topeka Capital also placed this month’s sales at 10 million to 12 million.
Several economists, however, said even if Feroli’s sales forecast is accurate, it’s probably not time to break out the champagne. While the billion-dollar sales figures may look big, they pale in comparison to the $13 trillion U.S. economy.
“We call that noise,” said Christopher Thornberg, a principal at Los Angles-based Beacon Economics. “You just can’t see it.”
He also said Feroli’s analysis fails to take into consideration how Apple sales may affect competitors or even consumer buying in general.
“What are consumers not going to spend money on?” Thornberg asked. “Ultimately, how much of that will be new spending and how much is fungible and how much will take away from competitors?”
Scott Anderson, chief economist at Bank of the West, agreed with Thornberg and said iPhone sales have to be compared to other factors affecting the economy.
For instance, he said iPhone sales may be dwarfed by the Midwest drought’s impact on agriculture. If current predictions hold true, Anderson estimates the drop in agriculture inventories could reduce U.S. GDP by 0.5 percent.
“Apple’s sales are big but not as big an impact as ag,” Anderson said.
In addition, the U.S. GDP has been slowing this year with major headwinds coming including the steep slowdown in China, Europe’s debt woes which are hurting U.S. manufacturing and business concerns about the fiscal cliff and pending loss of the Bush tax breaks.
In the second quarter, GDP growth was 1.7 percent, down from 2 percent in the first quarter, according to the Bureau of Economic Analysis. Bank of the West estimates U.S. GDP will come in under 2 percent this year, likely closer to the 1.7 percent in the second quarter.
Contact the writer: 714-796-3646 or mmilbourn@ocregister.com
