Apple’s annual iPhone announcements are among the tech industry's most buzzworthy events, but it turns out that consumer spending on the devices has broader implications for the economy. Michael Feroli, chief U.S. economist for JPMorgan Chase & Co., told the New York Times Sunday that there’s evidence that iPhone sales add between one-quarter and one-third of a point to gross domestic product growth.
Barely more than a month after their U.S. debut, the iPhone 6 and larger iPhone 6 Plus are creating a ripple effect throughout the economy. The influx of consumer spending that comes with the release of new iPhones has become so reliable, in fact, that economists are no longer surprised at post-launch market surges.
“The iPhone is having a measurable impact,” Feroli said. “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.”
The iPhone 6's carrier-subsidized starting price is $199, but customers who sign up for a new phone plan pay a variety of fees and wind up doling out an average of $603. Building the device costs Apple about $200. Not only is the iPhone Apple’s most popular product but it brings in somewhere between 60 and 70 percent of the company’s profit every year.
“The market is obviously counting on another strong sales performance for the new iPhone,” Feroli told the newspaper, adding that electronics stores have seen sales jump by 3.4 percent in the month since the iPhone’s release, while clothing store sales have fallen by 1.2 percent.
“People are buying iPhones, partly as a status symbol. They’re not buying as much clothing,” said Feroli.