Bad stat watch: Apple iPhone 5 won't account for .5% of US GDP/$75B

Bad stat watch: Apple iPhone 5 won't account for .5% of US GDP/$75B
Because it's the end of the year, sites are starting to put together "year in review" stories, and one of the numbers that will make many media types drool is also one that doesn't have any basis in fact. So, we wanted to do a little "bad stat watch" to warn you about this misleading number which claims that the Apple iPhone 5 economic impact could shift the entire US GDP by .5% or $75 billion dollars.

The number has started circulating again because of the Mobile Year in Review done by MobileFuture, which pulled that statistic for its video. The trouble is that the number came from a projection made back in September before the iPhone 5 was even released. What's more, in the original article from Forbes that reports the projection, the number is discredited as being highly unlikely

$75 billion is a ridiculous number

Here's how it went down: JP Morgan put out a report before the launch of the iPhone 5 saying that "the release of iPhone 5 could potentially add between 1/4 to 1/2%-point to fourth quarter annualized GDP growth". So, the first error is pretty easy to spot: the original projection was for Q4 annualized GDP growth, but to get the insane $75 billion dollar figure, you have to apply that .5% growth to the US GDP for the entire year of 2011. 

So, that's just flat out misleading and bad math to get the sensationalized $75 billion dollar number. But, of course even that assumes the .5% statistic could be correct, which it most likely isn't.

.5% impact on the Q4 US GDP isn't crazy, but highly unlikely

In the original article by Forbes, the author notes that the calculation is somewhat reasonable, but it has one big flaw: it assumes that all spending on the iPhone 5 would be added on top of what a person would already be spending for the year. In reality, it's more likely that many people will spend less on something else in order to afford an iPhone 5, in which case the effect on the GDP would be zero. 

There will be people who saved their money in order to buy the iPhone 5 which would add to the GDP, but it is highly unlikely that everyone who purchased an iPhone 5 will have done it that way. It's more likely that money will be shifted in home budgets, which negates the impact on the GDP. 

Conclusion

The iPhone 5 is going to sell a lot of units, but even Apple doesn't have the power to make as big an impact on the entire country's GDP as some will have you believe. It all just goes to show, if a number seems unbelievable, it likely is. And, always check sources, because some others won't.

Related phones

iPhone 5
  • Display 4.0" 640 x 1136 pixels
  • Camera 8 MP / 1.2 MP front
  • Processor Apple A6, Dual-core, 1300 MHz
  • Storage 64 GB
  • Battery 1440 mAh(8h 3G talk time)

FEATURED VIDEO

25 Comments

1. androidisbaws

Posts: 74; Member since: Dec 17, 2012

Betcha Samsung could do it if they were an American company.

2. abdane

Posts: 507; Member since: Oct 07, 2011

i agree, if samsung was an american company it could make it !!!

3. androidisbaws

Posts: 74; Member since: Dec 17, 2012

They do TV's, PC's, home appliances, phones, tablets and much more so they'd be able to pull it off I think.

5. PhoneArenaUser

Posts: 5498; Member since: Aug 05, 2011

Products: Apparel, chemicals, consumer electronics, electronic components, medical equipment, precision instruments, semiconductors, ships, telecommunications equipment. Services: Advertising, construction, entertainment, financial services, hospitality, information and communications technology services, medical services, retail.

8. androidisbaws

Posts: 74; Member since: Dec 17, 2012

Yeah they've got their foot in everything

20. Aeires unregistered

I also read they make tanks for the military. Maybe they should have driven one of those to the Apple vs. Samsung trial.

21. legokangpalla

Posts: 6; Member since: Oct 23, 2012

They also have a joint car company with Renault. Samsung insurance, cards, even banks.

14. the_best

Posts: 139; Member since: Oct 14, 2012

i bet neither samsung nor apple pays any taxes, so even if these numbers were correct it doesnt really matter...

16. mas11

Posts: 1034; Member since: Mar 30, 2012

Nah all Samsung needs to do is put a fruit logo on their products and use words like "revolutionary" and "innovative" to market them.

4. gazmatic

Posts: 807; Member since: Sep 06, 2012

hey PA... do you go trolling around for all apple related news? how is this even relevant to anything?

7. MichaelHeller

Posts: 2734; Member since: May 26, 2011

We saw incorrect information starting to make the rounds, so we wanted to correct it and make sure no one got wrong information.

13. gazmatic

Posts: 807; Member since: Sep 06, 2012

I never believed it when it was first floated around... the only time it made any sense was when they *gasp* were on track of becoming the first trillion dollar company their portfolio does not merit that title though dont get me wrong, I'm not bashing apple, I've used their products and they are good products. just not great products nothing about an apple product justifies its high cost I have nothing against high cost products... i OWN several alienware laptops... they are all over priced... however I atleast get to brag that i have the best benchmarks around... ie the best gaming laptop money can buy (there are always cheaper equivalents that will play the same games at high fps but none as high as alienware) dont get me wrong... i would prefer them to be thousands of dollars cheaper but i know that for the price I CANNOT GET ANYTHING BETTER!!! not the same with apple i dont live in america, nor do i get the google playstore i receive no subsized phone, plus i have to deal with customs, taxes and VAT it is impossible to get an unlocked iphone5 for LESS than $1200 trust me... i've tried maybe next year when they release the 5s

22. Reluctant_Human

Posts: 913; Member since: Jun 28, 2012

Appreciate the correct info. Some sites won't make the extra effort which is why I come here.

12. jmoita2

Posts: 930; Member since: Dec 23, 2011

Ridiculous article. Someone is desperate to write anything with "Apple" in it...

15. MichaelHeller

Posts: 2734; Member since: May 26, 2011

So you don't care if all the Apple fans out there start quoting this stat as if it were true? It's a crazy false stat, and I don't like misinformation going around. That's my excuse. What's your excuse for taking the time to click on this "ridiculous article" and commenting?

17. jmoita2

Posts: 930; Member since: Dec 23, 2011

Herr Heller, as the Chiropractor said, I stand corrected...lol

18. Republican

Posts: 99; Member since: Apr 05, 2012

Michael Heller, you are unworthy to speak of the greatness of Apple. Envious hater!!!

19. phil2n

Posts: 519; Member since: Apr 30, 2012

i believe that coke can take 5% of America's GDP Apple is not gonna make it

23. cr8tive007

Posts: 53; Member since: Mar 30, 2011

The only way BIG FRUITY could add to our nations GDP is by actually making a decent phone here in AMERICA! They reap in the profits, don't pay any taxes, and cruise the high life paying illegals to do their laundry, gardens and even raise their kids! Shame on you APPLE for standing so tall and proud. I feel if you should be required to have your HQ where you make your product.... boy that would bring a lot of factory jobs back to the US HUH?

24. techloverNYC

Posts: 601; Member since: Nov 20, 2012

Samsung is South Korea's main financial support. To compare Apple to Samsung is not fair as samsung is basically the governments company. If Samsung fail watch South Korea go to recession. As if Apple fail google will just take over proly...

* Some comments have been hidden, because they don't meet the discussions rules.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.