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Posts Tagged ‘iPhone 5’

The trillion dollar phone – iPhone 5

In Finance, Technology on September 13, 2012 at 11:58 am

I blogged about Samsung Galaxy S 3 couple of months back and several people wrote back to me with interesting experiences.

I was contemplating of not writing about iPhone 5, since this blog is about finance not about technology. Ahhh!!! my itch to write about iPhone 5 took-over my right side brain :).

Apple started its conference 6 pm UK time on 12th September 2012 and iPhone was revealed in minutes. My husband has taken the kids for swimming at the local swimming club. Guess what !! he called me around 6.30 and said …… ‘hey dear, do you know what iPhone 5 is here ….’. I said what about the swimming and kids. To my surprise he told me kids are in the pool and he is sitting next to the pool reading live twitter feed on the Apple event (of-course he skipped his swimming). That time I realized, technology craze has taken over every educated men (& women) in western (& eastern) world. By the time I am finishing this blog, the blogosphere is filled with thousands of blog about iPhone and millions of them are underway.

The question is –  What is the financial implication of iPhone in the world? In a recent research note JP Morgan said the new iPhone could add upto half a percentage point towards US GDP annualized growth (US 0.5 % GDP annualized growth = 3.2 billion dollars), which is twice of the total GDP of Bhutan or four times the annual GDP of Somalia. In layman terms, Apple can take over the economies of Bhutan and Somalia by just selling iPhone 5 in one quarter in United States.

The another important growth area would be semiconductor market. RBC Capital market estimates the total revenue of 13.2 billion dollars in 2013 (i.e 4.4% of total semiconductor sales) coming from iPhone. Not to mention the big jump in revenue expected by the mobile companies by introducing 4G network. The overall financial impact of iPhone launch can very well cross $ 100 billion in 2013.

What’s in it for Apple ….. be ready to see the world first company touching 1 trillion dollar market capitalization.

I love Apple more than Samsung because the impact it creates on the financial market and economy of the world, this kind of influence is never seen from any other product or by any other company in corporate history of the world.

The hype, the show and the finally the King of smart phones – The iPhone 5 – The Trillion Dollar Phone.

Comments welcome.

The Economics of owning Samsung Galaxy S 3

In Finance, Uncategorized on May 31, 2012 at 5:58 pm

The Samsung launched its flagship Galaxy S 3 couple of days back in 28 countries. Talking about the smart phone and its great great features is increasing becoming one of the most talked about pub-talks. I don’t own a smart phone myself but my husband is a proud owner of iPhone 4. For last many months he is waiting eagerly for the next big thing ‘The iPhone 5’ (he even check the latest gossip on the proposed launched ……. I emphasize with him).

He is pasturing me for last one year to buy a smart phone. The launch of Samsung Galaxy S 3 tempted me to sneak peek the newest-must-own-gadget. Being finance professional, I always wonder on the economics of ownership. Alright let us begin ……

What would you choose ….. Paris or Galaxy S 3

First the let us understand straight cost of ownership of fully unlocked Galaxy S3 for 12 months:

  • 1 unlocked phone = USD 799 or Euro 645 or GBP 519 or INR 43000 (to keep it simple, I will use USD) = $ 799
  • Screen guard/pouch/accessories = $ 50
  • Insurance 12 months = $ 84
  • Average cost of new apps buy in 12 months (some of them you need, some of them you buy because it is on your friend’s phone) = $ 35
  • Data charge = $ 180
  • Total (A) = $ 1148

(Call charge not taking into consideration, you will need a phone regardless of it being smart or not)

Now let us add the cost you would ignore:

  • Productive working hours you will use fiddling your phone everyday, playing games, exploring apps and admiring photos (assumption taken on minimum wages) = 1 hour * 365 days * $7.25 = $ 2646.25
  • Total (B) = $ 2646.25
  • Assume you will sell the phone after 12 months of usage. The resell value of phone with generic wear-tear will be 40% of MRP = $ 319.6
  • COST OF OWNERSHIP = A+ B  – resell value = $ 1148 + 2646.25 – $ 319.6 = $ 3439. 65 (aaaaawwwwwww !!!)
  • Compared to this cost, if I want to take 1 week of luxurious holiday with my partner in Paris, it would be approx. = $ 2950

My husband would have chosen Samsung Galaxy S3 and I would have chosen an evening in Paris .

What would you do 🙂 ………. Please comment !!!!!