Can the iPhone 5 save the US economy?

In today’s economy, there’s only one company that can pull this off. And there’s only one product that they could use to do it.

iPhone 4 311 R (photo credit: REUTERS/Truth Leem)
iPhone 4 311 R
(photo credit: REUTERS/Truth Leem)
Bigger than the Pentagon. More money than the Treasury. The Biggest Company in the World. These are just a few of the snippets that have appeared in the media in the past week or so, as once-rebel Apple morphs into the bluest of bluechip companies – and perhaps offers the United States the opportunity to wake itself out of an economic slump that has been going on for far too long.
Can one company – a single corporate entity – move American consumers to start spending, thereby encouraging companies throughout the economy to spend what are said to be considerable assets on capital investment and hiring? Companies are not spending, the common wisdom says, because they are unsure of the future of the economy. But with a big boost in spending by those who can afford it, the positive sentiment, long lines at the store, and gaga reviews in the media of a super product that gets everyone excited might just be the thing to get things moving again.
In today’s economy, there’s only one company – Apple – that can pull this off. And there’s only one product – the iPhone – that they could use to do it. And fortunately, we’re just a few weeks away from the introduction of a new iPhone! First, a note on those superlatives I heaped on the wizards of Cupertino in the intro. Last week, Apple surpassed Exxon as the world’s most valuable company. It became official on August 10: At the close of trading, Exxon had a market value of $330.8 billion, compared with $337.2 billion for Apple. Of course, the pundits attributed the lowering of Exxon’s valuation to lower oil prices and other factors, but the fact that a NASDAQ upstart could even be withing spitting distance in terms of valuation of the hundred year old descendant of the scions of the Rockefeller family (Standard Oil, which begat Esso, which begat Exxon) is amazing in and of itself.
Apple is so big – and so wealthy – in fact, that on July 29, before the raising of the US debt limit, Apple had more money in the bank ($76 billion) than the US Treasury did ($74 billion)! And then, of course, there was the latest announcement – that the company would build a new flying saucer shaped headquarters in its hometown of Cupertino, California, that will be bigger than the Pentagon (! Steve Jobs himself presented the plan in recent weeks to the Cupertino City Council, complete with plans and sketches. The massive 4-story building – which is already being called a piece of landmark architecture; Jobs actually used the word “spaceship” to describe it, telling the Council “we’ve used our experience making retail buildings all over the world now, and we know how to make the biggest pieces of glass in the world for architectural use. And, we want to make the glass specifically for this building here. We can make it curve all the way around the building... It’s pretty cool.”
Apple is such a major force today, in fact, that fake Apple stores are cropping up all over the place in China – to date, 27 have been discovered, and as China is a big place, more are sure to be found. China, of course, is known for its product knock-offs, and even for brand purloining – but to “steal” a whole retail look and feel – down to the smallest details – means that Apple has a power that goes far beyond that of an ordinary company. And we haven’t even mentioned the huge profits Apple has been pulling in for iPhones and iPads in recent quarters.
If once it could be said “As GM goes, so goes the nation,” today something similar can really be said of Apple. Which brings us to the iPhone 5.
Despite the “anti-fanboys” touting Android phones as perfectly good, or better, alternatives to the iPhone, an amazing 35% of American consumers said in a poll (by web comparison site Pricegrabber) a few weeks ago that they were planning on buying an iPhone 5 when it comes out (; the date looks to be in early September, according to the latest rumors. That’s not 35% of current iPhone owners, or 35% of cellphone users – but 35% of all consumers! How many consumers is that? Well, if you count as “consumer” anyone over the age of 18, that comes out to well over 75 MILLION people who say they plan on buying an iPhone 5! With things looking pretty gloomy on the economic front in Europe and the US for awhile now, and China and Japan facing their own problems (inflation and deflation, respectively), it’s become clear that the best hope for a world economic recovery lies with the US “Recovery” in the US means two things – spending and jobs, not necessarily in that order. Jobs take a commitment by corporations to develop, though; what the economy really needs right now is a kickstart to get things moving, and convince corporations that they can make more money by hiring people and producing, than by sitting on their money.
Imagine the lines around the Apple Stores, the AT&T and Verizon service centers, with 75 million consumers queuing up to get their iPhone 5.
That could be a recession buster right there!