The iPhone 5 News Blog News Feed |
| “It’s the Economy, Stupid!” Will the Tanking U.S. Economy Affect the iPhone 5 Launch? Posted: 31 Jul 2011 08:35 AM PDT
For anyone following Apple news these days, a virtual tidal wave of iPhone 5 sales purportedly is upon us, and there are plenty of reliable reports that corroborate this theory. Back in early June, we reported on how Apple was planning to initially order 15 million iPhone 5 units to be produced for the device’s launch. In early July, we reported that Apple was planning on selling 25 million iPhones 5s by the end of 2011 — an astounding number. Even more astounding is a recent study which claims that 35% of ALL Consumers Will Buy the iPhone 5. Given the love, affinity, and commitment that Apple users feel toward the iPhone — as well as the seemingly millions of more people who are yearning to become iPhone users — it isn’t hard to imagine how these aforementioned sales numbers could come true, especially if the iPhone 5 turns out to be the groundbreaking device that it promises to be. But strangely absent from all of these analyses is any consideration of the U.S.’s faltering economy, joblessness, and debt crisis, all of which could conspire to dampen the iPhone 5 and its hefty price tag. Many U.S. consumers have tuned out the economic news, since it always manages to turn out badly these days. But here’s a quick summary of where the U.S. stands: 9.1% unemployment, 18.2% underemployment (according to Gallup), a sluggish 1.3% growth rate, a government spending rate of $4.1 billion dollars a day, and the real risk that the U.S. could either default on its debt commitments and/or lose its AAA credit rating, thus sending interest rates soaring. Ah yes — good times here in the ‘ole U.S of A. A recent Bloomberg article paints a picture of how unemployment is fueling a drop in consumer spending, which in turn is leading to more unemployment: “Consumer spending from April through June showed the smallest gain since the second quarter of 2009, when the economy was in recession, the Commerce Department report showed. The slump reflected a 4.4 percent plunge in purchases of durable goods like automobiles,” and that “The U.S. probably failed to create enough jobs in July to reduce unemployment, showing anxiety over government debt deliberations and a slowdown in consumer spending have shaken employer confidence.” While politicians and economic leaders wrangle with the issue, U.S. consumers hang in the jobless balance. Given all of this bad news, how is it that so little is being said about how the faltering economy may affect iPhone 5 sales? All of us have tried to grasp the reasons behind Apple’s decision to release the iPhone 5 later than usual. Regardless of whether the delay was caused by production issues, deals with Verizon, or strategic positioning against competing smartphones, one thing is for certain: Apple is releasing its new iPhone in the middle of an economic meltdown.
How will Apple manage 35% of all consumers owning an iPhone 5 in the midst of such high unemployment and low consumer spending? iPhone 5 Consumer Demand: A Sociological Perspective There are two possible answers to this puzzle. The first is more sociological in nature: the iPhone has indeed become ubiquitous. It is no longer a luxury, but rather a part of our hegemonic cultural norms. I liken it to when Thomas Edison invented the lightbulb: sure, people could argue that oil lamps and candlelight — which had been used by people for light since the dawn of civilization — would suffice, and that electric light was somehow “a luxury.” But it didn’t take long for the quality, reliability, and safety of electric light to transcend the lightbulb from a luxury to a necessity — it became a societal staple. And the mainstreaming of the lightbulb led to a boom of electric-powered technology that revolutionized the way we live. Sounds a bit like like the iPhone, no? Perhaps the smartphone is becoming more than a nifty gadget for geeks to play around with in lieu of having to, you know, socialize. Maybe now the smartphone represents the mainstreaming of a technology-powered lifestyle — a practical means of recreating mankind into something akin to a cyborg — and the iPhone is the flagship smartphone that will usher in this sociological sea change. And for that reason, consumers will shell out the money. . . . Or, Maybe the iPhone 5 Will Come Cheap A more practical explanation for how Apple could rack up unprecedented iPhone 5 sales could be that they will keep the iPhone 5 price point in line with the iPhone 4′s initial pricing, and the U.S. mobile carriers will generously subsidize iPhone 5 sales to existing subscribers in exchange for a re-up n a big contract. This could be especially true if Apple brings Sprint and T-Mobile on board: both of those carriers will offer the iPhone 5 to their current customers with a great upgrade deal, making it more affordable to invest in the new iPhone. This approach to explaining an iPhone 5 sales boom in the midst of an economic collapse could also support the theory of a lesser-priced iPhone 4s — an idea that I have never subscribed to myself, but would explain how Apple plans on accommodating the poor economic conditions. For as much as tech analysts have staked out audacious claims for iPhone 5 sales, the actual performance of the beloved device still remains as unclear and unseen as the trajectory of the U.S. economy itself. There’s no doubt that Apple is a special company that manages to transcend the struggles and limitations that other tech companies endure. Heck, there was even a report this week that Apple currently has more cash in the bank than the U.S. government. Hey — with that in mind, maybe we ought to let the Apple brass take over running the U.S. government? Steve Jobs in 2012! Who’s in? |
| You are subscribed to email updates from The iPhone 5 News Blog To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
