The IPhone is the only Ray of Hope

The economy is collapsing. The banking disease has now extended to the US's "real economy". Tax stimulus and the consumer economy have failed and we seem to be headed to a real depression very quickly. The IPhone is the only thing that can save us here.

The economy is collapsing.  The banking disease has now extended to the US's "real economy".  Tax stimulus and the consumer economy have failed and we seem to be headed to a real depression very quickly.  The IPhone is the only thing that can save us here. 

Apple is a once in a lifetime company.  The produce amazing products that disintermediate and change other industries.   They changed the entertainment industry with the iPod and they gave notice that they would change the telecom industry with the first IPhone, which was a simply unbelievable product.

Last year Apple was a US centric company that had failed to get its products global.  This year, it is a remarkable company with worldwide products that sell and sell and sell.  In the first 3 days of the release of the new IPhone, it sold 1 million units in the US alone (the company has not released worldwide numbers, but they would be much greater).  1 million!

This phone is initiating an entirely new upgrade cycle in a tremendously important industry.  It is clear to me that Apple and its carrier partners (ATT in the US) will be tremendous beneficiaries of this.  Certain other companies in the food chain, such as the chip manufacturers, should also benefit derivatively.  Other handset manufacturers on the cutting edge, such as RIMM, may also benefit from increasing migration to smartphones.  (Still other manufacturers, such as Nokia, Motorola and Samsung, will die violent deaths as a result of this.)

I cannot get my paws on a new IPhone after going to several Apple stores and ATT stores. 

The so-called "real economy" is now a technology economy.  The $64,000 question is whether Apple and the amazing things that it is doing can enable the real economy to survive this mess. 

Even if it can't, Apple will stay strong and will probably cushion the blow for many parts of the tech sector.

(On a side note, I would note that in a crashing economy, shorts tend to go after the last company standing tall to try to bring it down.  I am looking forward to seeing these folks get killed when Apple runs to $200 next week).


Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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  • Sam Cass

    July 16, 2008

    The iPhone release was a bit of a debacle. Many consumers are not happy with their 3G phones. The 1 million number is also Jobs typical hype. They have shipped 1 million phones to their retailers but have not activated or sold close to 1 million phones. I've heard reports of AT&T stores sitting on 500-600 phones with little customer demand. I'm going to drive by my local store to see if they have any in stock. I'm betting they will.

    Apple is doing some interesting things but I don't think a cellphone is going to be the next savior.

  • AronLiv

    July 16, 2008

    They won't have any in stock. The device and the company are once in a lifetime things.

  • Sam Cass

    July 16, 2008

    We'll see. I bet they'll have plenty. Going out now.

  • JRodgers

    July 16, 2008

    This article is correct, but underscores a real problem with our tech industry in the US. The problem is that other than Apple, and maybe Intel and VMWare, there is no creativity that is pushing new product cycles right now that can get either the consumer or the corporate dollars.

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