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Will ‘courage’ help Apple shares to reboot?

Apple's not quite a one-company ETF but it does dominate passive tech approaches

 
Will ‘courage’ help Apple shares to reboot?

Over the last few weeks much has been written about the latest steps Apple has taken to change the way consumers use their mobile devices - from the headphone jack removal to substantial camera improvements for its flagship products iPhone 7 and iPhone 7 Plus.

Although Apple has said that it would no longer report the volumes of the new iPhones sold over the first pre-order weekend, it is clear that customers have shown strong interest in its recently unveiled products.

The company managed to sell every iPhone 7 Plus and jet black iPhone 7 in just a few days, leaving a handful of devices available on the shelves of its Apple Stores.

Hit the road, Jack

All this has caused the stock to respond in a flash. Apple stock posted a strong 11% gain in the four days after the products were made available for pre-order, thus reclaiming its notorious hype among investors.

It seems that the ‘courageous’ (their words) move to oust the 19th century headphone jack that's still being used on tens of billions of devices has not bewildered faithful Apple customers.

Quite the opposite, it has encouraged many to change their minds about a manoeuvre that has the potential to be a game changer on a scale not seen since the first iPhone was unveiled.

On the financial side, the Cupertino-based behemoth seems to have a bright future ahead, as the novel wireless headphones should serve as a new source of profit in addition to its existing products.

The US$159 AirPods have the potential to become the preferred audio solution for iPhone users and could expand to other devices. Given the new potential source of revenues, Apple may return to growth in the upcoming quarters.

Ways to Play with ETFs

Buy a tech ETF and - so big is the business - that you will certainly  get a bit bite of Apple in there. The iShares S&P 500 Information Technology Sector Ucits ETF for example has 14.7% of its assets in Apple with a further 11.7% in its old nemesis Microsoft. 

The name of the SPDR MSCI World Technology Ucits ETF suggests more geographical diversity – in fact Apple remains king of the hill here with a 12.6% weighting in an ETF that has less than 15% of its assets outside the US.

PassiveBeat brings together Citywire’s coverage of all things to do with ETFs, Smart Beta and passives in general. For feedback, comments and contributions, please tweet and follow us @passivebeat or drop us an email at passivebeat@citywire.co.uk

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