Massive sales of next-gen iPhone could boost U.S. GDP

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A research note released by J.P. Morgan on Monday estimated that sales of Apple's next-generation iPhone may add between one quarter and one half a percentage point to fourth quarter annualized U.S. gross domestic product growth in 2012.

According to the firm's chief U.S. economist Michael Feroli, estimated domestic sales of the so-called iPhone 5 will be about 8 million units in quarter four, not including purchases of carry-over phones like the iPhone 4S.

Feroli goes through the calculations that arrived at the relatively large GDP contribution: by finding the difference between an assigned retail price of $600 per handset, similar to past launches, and an imported cost component of $200 per phone, a $400 per iPhone trade margin can be applied to the GDP.

"Thus, calculated using the so-called retail control method, sales of iPhone 5 could boost Q4 GDP by $3.2 billion, or $12.8 billion at an annual rate," Feroli writes. "This would boost annualized GDP growth in Q4 by 0.33%-point."

The economist goes on to note that while out-of-pocket prices may be lower due to carrier subsidies, usually about $350 per device, companies that sell the phone often report sales based on stand-alone prices.

Even Feroli recognizes the GDP bump as "fairly large," noting the estimate should be "treated skeptically," but he believes the projection is in line with historical iPhone sales trends. For example, when the current-generation iPhone 4S launched in October 2011, retail sales outperformed expectations and contributed to a combined 37 million unit sales of all iPhone models in the fourth quarter of 2011.

From the note:

Essentially all iPhone sales occur either on-line or in retail stores. Over half of the 0.8% increase in core retail sales last October occurred in two categories: on-line sales and computer and software sales, which combined had their largest monthly increase on record. The incremental growth of Q4 sales at those stores over Q3, if due to the iPhone, would have added between 0.1% to 0.2%-point to Q4 growth, after subtracting the import drag.

Feroli expects the iPhone 5 launch to be "much larger," and reiterates the original 0.33 percentage point GDP increase is reasonable.

Apple is widely expected to debut the sixth-generation iPhone at a special event on Sept. 12 ahead of a rumored Sept. 21 launch date.