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Posts Tagged ‘money’

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 www.finguru.org 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.

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Understanding types of Loan

In Banking, Finance on May 28, 2012 at 9:58 am

Money requirement changes over a period of time, some individuals require money to build house, some for marriage, buying an expensive car or it may be for kid’s education. Corporate houses have different requirements like starting a new business, expansion of existing business etc. These requirements can be fulfilled by selection of few options. First option is to self – fund, second option is to take loan (debt), third option is to raise equity and last is through partnership/joint venture and strategic arrangements. When self-funding is not available, corporate mostly avail a mix of debt and equity. Equity has lots of entry barrier and required large capital, individual go for taking a loan.

A loan is given by one party to another party with the agreement that money will be repaid after a certain period of time. In a loan contract, borrower (who takes the loan) pays certain percentage of the principal amount to lender (who gives the loan) as compensation for borrowing. Maturity date of the loan is the date by which the borrower must have paid the loan.

There are 2 types of loan – secured loans and unsecured loan.

When a loan which is guaranteed by collateral, it is termed as secured loan. Its best example is home loan – when a person buys a home, he/she make some amount as down payment to the builder and for rest amount he/she may take as home loan from a bank or financial institution. In case of default of the assets, lender (bank or financial institution) has right to seize home.

When borrower does not deposit any kind of asset against the loan, it is termed as unsecured loan. Personal loans, bank overdraft and corporate bonds are good example of this.

They are other very popular loans like business loans (type of secured loan) where borrower need to present a business plan, education loan (unsecured loan up to a specific amount) where borrower is a student and take this loan for higher education.

Now an interesting question arise in the mind how banks categorize whom to give loan or not. See my next blog on this.