Economic Implications of IPhone5 Research Paper

Economic Implications of IPhone5 - Research Paper Example It was desired that, with the launch of Iphone5, an estimated 3 billion dollars would be channelled into the United States economy by the end of 2012. In spite of this contribution by Iphone5, the expected economic growth of the United States is to be within a weak rate of 2-2.5% between the periods of October to December 2012 (Rushe, 2012). With the release of Iphone5, an estimated pre-order sale of over two million units was recorded, using these records, Apple hoped to sell more than forty million units by the fourth quarter of 2012. With such deliberations, it is evident that Iphone5 has played a great role in improving the economy in different ways. Positive impact of iphone to the economy With these kinds of figures, it is obviously noted that Apple is growing together with its products, which is a good sign of the economic growth of the United States. It is projected that the sales of Iphone5 could end up boosting the United States economy (Worstall, 2012). Iphone5 would produ ce an estimated 3.2 billion dollars in the fourth quarter, or 12.8 billion dollars annualized, which would end up adding 0.33% to the GDP growth in the last quarter of 2012, even when previous Iphone generations are kept at a solid pace. The last Iphone4 launch was virtually around the same time as that of Iphone5 in 2011 (Agarwal, 2012). The overall sales within the launching month outperformed the expected expectations. Iphone sales occur either in retail stores or on-line. Over half of the 0.8% core retail sales increase, manifested during the sale of Iphone4 occurred in two main categories: online and computer, and software sales (Rushe, 2012). These combined, resulted in the largest monthly increase to be recorded by Apple. This incremental growth over the fourth and third quarter sales at the stores, if credited to Iphone, would have resulted in a growth of 0.1% to 0.2%-point to fourth quarter growth (Curwen & Whalley, 2010). This portrays an upward trend as compared to the gr owth that was portrayed when the Iphone4 was launched. This trend helps illustrate the fact that Iphones are affecting the American economy positively (Worstall, 2012). Apple strives to develop innovative and groundbreaking technology, which supports the consumers even in the stagnating and a weak economy of the United States. Apple strives to consistently produce products that are better than their previous ones and those of their competitors too. Apple has a big future together with Iphone5 which also reflects a positive future for the United States economy (Rushe, 2012). This positivity may be seen from the fact that, with recent updates on the Iphone5, which include an upgrade in Chinese language recognition with a comprehensive Chinese dictionary. These upgrades will aid Apple to fully penetrate the Chinese markets. This will enable them access an additional potential users amounting to nearly 120 million who could end up adding an additional 30-40 billion dollars in sales (Wor stall, 2012). Although Iphones are manufactured overseas, most of the prices paid on purchase of these gadgets add value domestically in relation to advertising, profits, retailing and wholesaling, which end up being counted as part of the G.D.P (Agarwal, 2012). The retail price of the new Iphone is estimated to be around six hundred dollars. Out of this money, two hundred dollars is to cover for the importation cost while the