Apple’s iPhone 6/Plus are retail’s Grinch

“Everyone knows the iPhone 6 is big,” Miriam Gottfried reports for The Wall Street Journal. “But investors might not appreciate just how far its sphere of influence extends.”

“Looked at in the short term, retail spending in the U.S. is effectively a zero-sum game. And when one company suddenly takes a bigger share of consumers’ wallets, others feel the pain,” Gottfried reports. “Wells Fargo estimates that U.S. consumers will spend nearly $14 billion on iPhones from launch until the end of this year. That equates to almost two-thirds of the year-over-year growth in U.S. retail spending last holiday season.”

“In other words, any extra money consumers spend on iPhones this year is money they likely won’t be spending on other items like clothing, accessories and home furnishings,” Gottfried reports. “And while pain during the all-important fourth quarter is bad enough, it may not end there. The release of the Apple Watch next spring threatens first-quarter sales, too. Wells Fargo estimates Apple will sell six million watches in the first year after its launch. At $349 each, that would add up to an additional $2 billion headwind for retail”

Read more in the full article here.

MacDailyNews Take: As we wrote earlier today:

“Merry Christmas, Samsung!”


  1. Basically this means that Apple owns US retail if not global retail and related employment…

    It would be worth remembering this DOJ amd all other biased puppet judges when you go killing the goose that lays the golden eggs with bogis witch hunts.

    1. You realize the corollary to this is that depression of retail sales in the non-Apple market is caused by iPhone sales, leading to job losses and such and may ‘prove’ the detrimental effect of Apple on the broader US retail market. 😛

    1. The “pain” refers to the hurt that Apple will place on other companies by capturing a larger percentage of retail spending. The statement asserts that this pain is not limited to the holiday quarter, but will extend into the next year.

  2. Geez, I never thought of it that way. I know I’ll be getting the watch when available, and, I’ll be putting off other purchases to afford it. Too bad for Apple’s competition. If they learned to innovate and make superior products, they wouldn’t have anything to worry about. Instead, they allowed hubris and greed to guide their stratigy, and now they’re going to have to pay the price.

  3. I was in the mall midday on Friday, two hundred people at Apple and there wasn’t 10 customers in Sears.

    I was in a Fry’s Electronics store, a “big box” store, Saturday at 1pm, there wasn’t 12 customers in the place.

    Last Thursday at 7pm, I was at a Best Buy- I was one of two customers. (I think the other guy was buying his first Mac).

    Ps: I didn’t buy anything in all three stores.

  4. I don’t buy this ‘analysis’. People who purchase Apple iPhones are part of the target demographic of people who have discretionary income and the proven will to spend it. WSJ should know better.

    1. The hundreds of millions of people who buy iPhones are not all individuals with higher incomes. Even most of the latter group has a lifestyle to uphold and budgeted spending habits.
      I get the ‘proven will’ part of your comment but this launch has the rumblings of a larger stampede than normal. That means more early upgrades with upfront phone purchases, and new customers perhaps broadening the target demographic.
      Don’t forget that the price of the high end model went up as did the incentives to upgrade within models. I think it’s fair to say that more people will be spending more money on iPhones this year than previously, leaving a bigger dent in their cash flow . Finally, if the popular gift of the holiday season is a new iPhone that means less is spent on other gifts.

  5. What I think is comical is that the pundits suggest that the ASP of the Apple Watch will be $349. It will not be. It will be much higher than that. Many of the people who will buy it will not be buying it to wear it to the gym. Get ready Wall Street, it’s going to be a bumpy ride.

  6. Gottfried’s take, while useful in understanding the potential for indirect impact on overall retail sales, misses on many levels. The first flaw is overlooking the fact that iPhone buyers/owners generally by more goods and services using their iPhones. With iphone’s mobility, consumers can more rapidly search, find & purchase products–and they are more likely to do so on a newer or newly purchased device.

    And long term I believe we’ll see that the convenience of Apple Pay well help bottom lines everywhere simply because consumers will feel ‘less pain’ when parting w/ their money. Think about it–how many times have you thought twice before making a purchase–whether it be ‘maybe I can find a better price’ or ‘do I really need this now?’ kind of thing–and before you reached for your wallet, you vetoed the idea. With Apple Pay, purchases have the potential to be WAY more spontaneous. Point being these factors will actually DRIVE economies rather than stifle them. Those in retail just need to get ahead of this and use it to their advantage rather than think of it as negative because long term everyone benefits..

  7. Not to mention all the money that will be spent on apps, cases, accessories, and even extended warranties. And unlike all the toys, games and some other gifts that might be bought, people will realize that an iDevice is the gift that keeps on giving – it’ll continue to be used long after most of that other cruft would be thrown or given away.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.