Apple’s iPhone - worth the wait?

Shares in Apple have risen this week following the unveiling of the long-awaited iPhone. Last year the stock made a positive contribution to the performance of the Gartmore Global Focus Fund and the Gartmore SICAV Global Focus Fund and Neil Rogan, manager of both Funds, thinks Apple’s share price can make further progress in 2007.

“Apple is one of the Funds’ successful long-term positions – the shares gained 18% last year after more than doubling in 2005. Our conviction is still strong and we added to our holding last week, taking advantage of a recent decline in the share price,” says Neil Rogan. “After a very strong performance in the second half of last year, the company suffered a set back in December as the company came under investigation by the Security and Exchange Commission into alleged backdating of stock options. Confidence has largely been restored now and the launch of the iPhone has encouraged even more positive sentiment.”

The new iPhone, about which there has been rumours for some time, combines Apple's iPod music and video player with a mobile phone and wireless Internet access for e-mail. Next year the group aims to sell 10 million of the phones, potentially increasing Apple’s sales by more than $1 billion. Apple simultaneously revealed its Apple TV product, a set-top box enabling users to stream music and movies from a computer to their televisions.

“The market’s initial response to the phone has been very positive. Shares in Apple rose 8%, the biggest gain in almost six months, reaching an all-time high at $92.57. Apple enjoys an almost unparalleled reputation when it comes to product innovation and it looks like the iPhone is no exception.”