These are stories Report on Business is following Thursday, Sept. 13, 2012.
Sometimes an iPhone is just an iPhone
The Globe and Mail says the days of revolutionary Apple devices are over. And The Wall Street Journal asks today if the iPhone 5 is boring.
Don't take that the wrong way. The new iPhone unveiled yesterday is still expected by some to be the best-selling gadget ever, so much so that JPMorgan Chase & Co. believes it could boost fourth-quarter economic growth in the United States by up to half a percentage point, annualized. As in, sales of up to 12 million this month, and tens of millions by the end of the year.
And the new smartphone certainly comes with new features. As The Globe and Mail's Omar El Akkad and Iain Marlow report, they include a bigger screen and better battery life. It's faster, thinner, lighter.
Remember, too, that the iPhone 4S had initially disappointed some looking for an iPhone 5 at that time. And it was a huge success.
It's just that it's just, well, an iPhone. Its shares did climb yesterday and again today, though, and analysts began upgrading the stock, calling for as high as $1,000 (U.S.).
Here's what some analysts are saying:
"This is going to be the best-selling consumer electronics device of all time, bar none." Carl Howe, Yankee Group, to Reuters
"There is not a wow factor because everything you saw today is evolutionary. I do think they did enough to satisfy." Michael Yoshikami, Destinational Wealth Management, to Bloomberg
“The surprise was that there was no surprise. It is an incremental product upgrade, which is showing how mature the product is.” Adam Leach, Ovum, to The Financial Times
“Given that the iPhone 5 is unlikely to solve the European debt crisis or bring peace to the Middle East, it won’t be surprising if we hear a resounding ‘meh’ from Apple’s critics, with them dinging the company for a paucity of innovation." Charles Golvin, Forrester, to The Globe and Mail
- Why the iPhone 5 is not 'revolutionary'
- Apple iPhone 5 could boost U.S. GDP by $3.2-billion in quarter, JPMorgan says
Fed moves aggressively
The Federal Reserve today unveiled aggressive new steps to juice economic growth, unveiling a third round of quantitative easing and pledging to hold interest rates at rock-bottom levels until at least mid-2015.
"The committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labour market conditions," the central bank's policy-setting panel, the Federal Open Market Committee, said in a statement.
"Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The committee also anticipates that inflation over the medium term likely would run at or below its 2-per-cent objective.
As The Globe and Mail's Kevin Carmichael reports, the low-rate pledge is an extension of its earlier timeline to the end of 2014.
When all is said and done, the Fed under Chairman Ben Bernanke will be buying up some $85-billion in securities a month. That includes the latest round of quantitative easing, dubbed QE3.
Unlike other central banks, the Fed has a dual mandate that includes holding inflation in check but also aiming for maximum employment. And at this point, America is plagued by a jobs crisis, with more than 12 million people out of work.
"In the face of continued disappointments in the pace of growth and job creation, the FOMC brought out the big guns, or at least whatever big guns they had left," said chief economist Avery Shenfeld of CIBC World Markets.
Separately, Fed officials trimmed their forecasts for the economy this year, to growth of between 1.7 per cent and 2 per cent, compared to earlier projections of 1.9 per cent to 2.4 per cent. They did, however, boost their forecasts for next year, calling for growth of to 3 per cent.
- Fed in aggressive move to juice U.S. economy
- Bernanke needs some friends in the private sector
- Fed set to prime pump with more stimulus
Potash hikes dividend
It didn't say much today, but Potash Corp. of Saskatchewan certainly said enough for shareholders as it hiked its dividend by 50 per cent.
The potash giant is hiking its quarterly payout to 21 cents a share (U.S.) from 14 cents.
“As we near completion of our potash expansion program, we see tremendous opportunity to continue our long track record of enhancing shareholder returns through the strategic use of capital,” said chief executive officer Bill Doyle.
“This dividend increase - the third in the past two years - not only reflects the strength of our cash flow today, but the confidence we have in the drivers of our business over the long term.”