So says BoAML’s China Economist Ting Lu, who presents the iPhone 6 case for Chinese exports as follows (our emphasis):
Though iPhone is an American product, it’s assembled in Mainland China (henceforth China) and all iPhones, except those sold in China, and are counted as China’s exports. The iPhone 6 is also important for Taiwan because the economy provides a significant amount of iPhone components including producing processors.
We found that the upcoming iPhone 6’s release could add about 1% per month to China export growth for the rest of 2014, while Taiwan’s export growth could be boosted by around 2% per month during August-October and 1% per month in November 2014 to January 2015. These numbers are not that small. Export growth of China and Taiwan was only 4.9% and 4.4% yoy in 2Q14 respectively, so a boost of 1 to 2 percentage points to headline export growth is no small matter, especially for the currency market which closely tracks export growth numbers.
Unfortunately, when it comes to Chinese GDP, that’s still not enough of an effect to have a meaningful impact. There’s more of an impact, however, when it comes to Taiwan:
Despite the hefty export bills brought by iPhones, China is little more than the low- end assembly line of the whole iPhone value chain. We estimate that manufacturing iPhone 5S in China only adds about US$8 per unit versus an average retail sales price at US$749 and the value added in iPhone 6 might be only slightly improved, so the launch of iPhone 6 will only have a negligible impact on growth of China’s GDP this year (at around US$9.8tn). The case is different for Taiwan where manufacturers provide about US$25 inputs in each upcoming iPhone 6.The iPhone’s contribution to Taiwan’s GDP is larger than previous models as the Taiwan based semiconductor manufacturer inked the contract with Apple for the first time and the production kicked off in late 2Q14. Our estimate suggests that its contribution to Taiwan’s GDP growth should be about 40bps this year. Note we recently upgraded Taiwan’s 2014 GDP growth to 3.4% from 2.9% on more robust export outlook and stable domestic demand in 2H14
http://ftalphaville.ft.com/2014/09/02/1953181/iphone-6-the-gdp-effect/
Though iPhone is an American product, it’s assembled in Mainland China (henceforth China) and all iPhones, except those sold in China, and are counted as China’s exports. The iPhone 6 is also important for Taiwan because the economy provides a significant amount of iPhone components including producing processors.
We found that the upcoming iPhone 6’s release could add about 1% per month to China export growth for the rest of 2014, while Taiwan’s export growth could be boosted by around 2% per month during August-October and 1% per month in November 2014 to January 2015. These numbers are not that small. Export growth of China and Taiwan was only 4.9% and 4.4% yoy in 2Q14 respectively, so a boost of 1 to 2 percentage points to headline export growth is no small matter, especially for the currency market which closely tracks export growth numbers.
Unfortunately, when it comes to Chinese GDP, that’s still not enough of an effect to have a meaningful impact. There’s more of an impact, however, when it comes to Taiwan:
Despite the hefty export bills brought by iPhones, China is little more than the low- end assembly line of the whole iPhone value chain. We estimate that manufacturing iPhone 5S in China only adds about US$8 per unit versus an average retail sales price at US$749 and the value added in iPhone 6 might be only slightly improved, so the launch of iPhone 6 will only have a negligible impact on growth of China’s GDP this year (at around US$9.8tn). The case is different for Taiwan where manufacturers provide about US$25 inputs in each upcoming iPhone 6.The iPhone’s contribution to Taiwan’s GDP is larger than previous models as the Taiwan based semiconductor manufacturer inked the contract with Apple for the first time and the production kicked off in late 2Q14. Our estimate suggests that its contribution to Taiwan’s GDP growth should be about 40bps this year. Note we recently upgraded Taiwan’s 2014 GDP growth to 3.4% from 2.9% on more robust export outlook and stable domestic demand in 2H14
http://ftalphaville.ft.com/2014/09/02/1953181/iphone-6-the-gdp-effect/
