Star tech manager: How to play the tablet wars
As Amazon attempts to undercut Apple, Henderson’s Stuart O’Gorman discusses whether this is the end for the iPad and outlines the go-to tech stocks.
by Chris Sloley on Dec 02, 2011 at 12:52
The launch of Amazon’s Kindle Fire could help expand the tablet computing market without breaking Apple’s iPad-based dominance of the sector, according to Henderson’s Stuart O’Gorman.
The AA-rated tech specialist manager made the comments as part of a monthly update, in which O’Gorman assessed the current trends and challenges facing tech investors.
At the forefront of trends, O’Gorman mentioned the launch last month of Amazon’s Kindle Fire – an updated and enhanced version of its digital reader priced at $199 and aimed at conquering the tablet computing market.
O’Gorman, who manages three tech-based strategies on behalf of Henderson, said the Kindle Fire may not be the threat to the iPad many commentators expect it to be.
‘The Kindle Fire could potentially cause further fragmentation in the tablet market as it represents another platform. In fact, the Kindle Fire may be good news for Apple, killing off the remainder of the Android tablet market,’ said O’Gorman.
And, while Amazon has ramped up orders for what O’Gorman calls ‘the poor man’s iPad’, he believes it will only serve to fragment the tablet market.
‘The cheaper Kindle Fire may can expand the size of the market while at the same time it is not a direct competitor to the iPad, and so the two can happily co-exist,’ he said.
O’Gorman has long-championed Apple as an investment and he said he expects the stock to remain a key part of the Henderson Global Technology fund in the near future.
Although, some managers have expressed concern about the company in a post-Steve Jobs world.
Another theme O’Gorman touched upon in his update was the emerging theme of paperless payments, which Henderson is tapping into through MasterCard, Visa and eBay (PayPal).
‘A continuation of the secular growth of all forms of electronic payment versus cash and cheque is expected,’ he said.
‘This growing trend is being boosted by the increasing use of card payments in emerging markets, as well as the emerging of new technologies in mature markets, such as mobile payments/near-field communications.’
The Henderson Global Technology fund has achieved 58.33% total returns over the past three years, while its benchmark, the FTSE AW/Technology TR, has risen 49.38%.
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