Apple grabs Gartmore’s attention

Apple, the maker of the iconic iPod, has recently grabbed the headlines for both good and bad reasons, although this may have obscured the real story about the potential of its computer business. EMI’s scrapping of copy protection on all its digital tracks means owners of digital music players other than the iPod can buy songs from Apple’s iTunes music store. Less welcome was the news that major record companies and Apple may face an investigation into anti-competitive behaviour by the European Commission.

While much excitement has been generated by the iPod and the newer iPhone, Apple’s computer business offers the real upside, arguably generating much of the recent unexpected earnings, according to Neil Rogan, Head of Global Equities and Manager of the Gartmore Global Focus Fund and the Gartmore SICAV Global Focus Fund. “Wilkes University recently became one of the first college campuses in the US to institute a university-wide switch from Windows-based PCs to Apple’s new Intel-based Macs, a development that mirrors the actions of other commercial and individual computer users around the world. Additionally, some analyst forecasts have overlooked the dramatic fall in the cost of the memory that goes into computers”. This offers potentially good news in terms of computer sales and margins for Apple, which is a holding in the Gartmore Global Focus Fund and the Gartmore SICAV Global Focus Fund.