Ireland, Korea and Taiwan are the main beneficiaries of the smartphone boom, according to the IMF.
Ireland benefited to the tune of a quarter of its economic expansion in 2017 from the iPhone, the International Monetary Fund (IMF) has claimed in a report.
As outlined in the latest IMF World Economic Outlook, Ireland reaped such benefits as it is here where the intellectual property of Apple is based.
‘In Ireland, where the intellectual property of Apple Inc resides, staff estimate the contribution in value-added terms of iPhone exports to account for one-fourth of the country’s economic expansion in 2017’
Apple employs around 6,000 people in Cork where it has had a base since 1980.
“Ireland, Korea and Taiwan Province of China are estimated to be the main beneficiaries of the new tech cycle in value-added terms,” the report said.
“In Ireland, where the intellectual property of Apple Inc resides, staff estimate the contribution in value-added terms of iPhone exports to account for one-fourth of the country’s economic expansion in 2017.
“At the same time, it is important to note that the income generated from smartphone sales does not fully contribute to the Irish economy. The acquisition of foreign-owned intellectual property assets leaves domestic employment mostly unchanged.
“In Korea, the production chain of smartphone-related components is estimated to have contributed about one-third of real GDP growth rate in 2017.
“In Taiwan Province of China, the contribution is estimated at about 40pc. In contrast, for China, the contribution is estimated to be much smaller, reflecting a larger and more diverse economy.”
The smartphone is the poster child of the new tech cycle
Globally, the IMF said that sales of smartphones reached close to 1.5bn units – one for every fifth person on Earth.
In effect, the smartphone is now the main computing platform for the world, overtaking PCs.
Mobile technology and services are estimated to have contributed $3.6trn, or 4.5pc of GDP, globally in 2017.
China exported $128bn worth of smartphones to the rest of the world last year, or 5.7pc of total exports.
According to the IMF, smartphones contributed about one-sixth of the estimated growth rate of global trade in 2017, driven by the value added per unit rather than the units sold, which actually declined for the first time on record.
The average sale price of an iPhone increased from $618 in 2016 to $798 in 2017, according to Apple’s financial results.
The IMF described Apple’s iPhone releases as the key determinant of the new tech cycle, with iPhone sales surging from 35.1m units in Q1 2012 to 78.3m in the fourth quarter of 2016.
The new tech cycle is divided into two components: the pre-release cycle, which involves the exports of components to China where most smartphones are produced; and the post-release cycle, with shipments of smartphones from China to the rest of the world.
“Overall, the new tech cycle has become an important new feature of the global economy,” the IMF said.
“Over the past six years, the enormous global demand for smartphones has changed the export and growth performance of several Asian countries through complex and evolving supply chains that involve several countries in the region.
“While the global market for smartphones may become saturated, demand for other electronics products continues to boost production of semiconductors, particularly in Korea. Therefore, the influence of the tech sector on Asia’s export patterns and growth is unlikely to fade soon.”
Tim Cook holds his iPhone during a visit to Ireland in 2016. Image: Laura Hutton/Shutterstock