Networks: iPhone 5 Will Boost GDP; Don’t Note When They Are Wrong
The release of Apple’s iPhone was a godsend, or so thought J.P. Morgan’s chief economist Michael Feroli. In September of 2012, the release month of the latest version of Apple’s iPhone, NBC, CBS, and ABC all reported Feroli’s prediction that the sales from the iPhone 5 could boost U.S. GDP by a quarter or half of a percent.
But the recent drop in GDP by .1 percent and Apple’s own stock drop have showed that predictions sometimes don’t come true. Unfortunately, not one of the networks has pointed that out.
ABC’s “Good Morning America” hyped on Sept. 13, that the iPhone “could hardly be more important to Apple” and referred to the sales as “mind-boggling huge.” After that, they hyped Feroli’s prediction. “the iPhone 5 could actually boost the nation’s gross domestic product.”
On the Sept. 25, broadcast of “CBS Evening News,” correspondent Anthony Mason discussed that Apple had already sold “more than 5 million iPhone 5s.” Senior Vice President of Game Stop, Mike Buskey replied that “it doesn’t sound like an economy in recession.”
NBC’s “Good Morning America” promoted the same prediction on Sept. 12. CNBC’s Mary Thompson stated that “one economist estimates it could add a quarter to a half percent growth to the economy in the fourth quarter.”
A half a percentage point is around $3.2 billion according to a Sept. 21, 2012, broadcast of ABC’s “World News with Diane Sawyer.” This would all go straight to the U.S. economy … so the question is, did this really happen?
On Jan. 15, 2013, the Wall Street Journal reported that Apple had actually cut down the production of the iPhone 5 due to an “unexpected” low demand for the new product.
On Sept. 21, 2012, the release day of the phone, Apple stocks closed at $700.09 a share. As of Feb. 5, 2013, Apple stocks had fallen to $457.84 a share – a loss of $242.25 or 35 percent. This was a huge loss for something that was supposed to have completely spiked the GDP.
In January 2013, when Apple’s stock took a huge drop, all three networks talked about this giant drop in stocks in their news programs, yet ignored their earlier predictions of the mega boost to GDP.
In reality, the economic activity turned negative in the fourth quarter, and the three networks each responded differently to this. NBC completely ignored it, ABC danced around the issue, and while CBS reported it, they downplayed the issue. One thing they all did do, however, was completely ignore their hyped up prediction about the iPhone.