Angel Apple Watches Over Economy
You might have thought that the economy of a country is dependent on the trade of goods and services. However, while considering economy and finances, we usually tend to forget the trend of generating revenues is not only restricted to brick and mortar companies nowadays – click and mortar companies are now dominating the market rapidly.
Now with hearing how economy is going down and what not, we believe we are doomed. But that’s when the iPhone flies in. Ever since its launch of the iPhone 6 and 6 Plus, the demand of the smartphones is higher than their delivery time. The ripple effect of this factor is so high, that it is actually causing change in the stock market.
iPhone sales have become so rife that The New York Times proved that it accounted for between one-quarter and one-third of a point to gross domestic product growth.
“The iPhone is having a measurable impact,” Michael Feroli, chief U.S. economist for JPMorgan Chase & Co., told the New York Times. “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.”
While the iPhone 6’s starting price is $199, but customers who sign up for a new phone plan pay a variety of fees and end up paying around $603. Building the device costs Apple about $200. iPhone being Apple’s most popular product actually manages to bring in about 60 to 70 percent of the company’s profit every year.
“Apple is now so big that it takes a lot to make it grow appreciably,” Toni Sacconaghi, an analyst at Sanford C. Bernstein said.
It’s producing an impressive interrelated ecosystem of products and services, including its forthcoming digital watches, its new digital payment system, its revived Mac line, refreshed iPads and new software operating systems. Even if all of its ventures succeed, none are likely in the next year or two to rival the financial impact of the iPhone.
“The iPhone is the core of Apple right now,” Mr. Sacconaghi said.
Right now, Apple is the biggest company in terms of market capitalization. It accounts for about 3.5% of the weighting of the Standard & Poor’s 500-stock index. Apple accounted for 18 percent of the entire rise of the S.&P. 500 index this year, according to calculations by Paul Hickey, co-founder of the Bespoke Investment Group.
And it is all due to the iPhone.
The hype regarding the iPhone has grown so high that sales for electronics were seen as increasing 3.4 %, while for clothing it fell by 1.2%!
We can only wait and watch how long it takes for Apple to start taking over our domestic lives and impact the world with its fingertips.