Mobile payment via the iPhone: as successful as iTunes?

September 09 2014
The introduction of a mobile payment system on the iPhone 6 promises similar potential to what was seen in the launch of the iTunes music platform 13 years ago, comments GAMAX portfolio manager Moritz Rehmann.

Single-handed operation, a large 5.5” screen and near-field communication (NFC) technology – tech bloggers and journalists want to know lots of these details in advance of the first presentation of the iPhone 6 at 10 a.m. local time today in the Flint Center for the Performing Arts in California (7 p.m. Central European Time). And despite Apple’s usual secrecy (“We wish we could tell you more”), technology specialists and stock market experts are already sure of one thing: the sixth generation of Apple’s mobile phone will be a resonating success.

“Far more important than new hardware components is the value US technology companies add through their inherent company values”, says Moritz Rehmann, portfolio manager of GAMAX Funds Junior and expert at DJE Kapital AG on investments in strong international brands. “The software is, as ever, state of the art in terms of user friendliness, maintenance and performance.” 

Customer loyalty is therefore comparatively high, despite the relatively high price – many users who currently have older models of the iPhone will now want the new one.

Apple Chief Tim Cook promoting the Strategic Domination of New Markets

An important factor here, according to Rehmann, is the consistent expansion of features, promising the expected standard of comfort in new fields. The portfolio manager is especially positive regarding the coordination with large credit card companies – Visa, Mastercard and American Express – for the launch of a mobile payment system. 

“Given this coordination that has now been agreed, and the reach of the Apple platform in the mobile sector, mobile payments could be on the cusp of a surge in development that will allow credit card companies to regain lost ground.” 

Just as 13 years ago the company reacted to the growth of platforms like Napster with a cooperation with the music industry and the introduction of iTunes, now Apple is working with credit card companies to create a promising alternative to services such as PayPal.

Just like the partnership with IBM, Rehmann believes this is an important step away from hardware innovation and towards the strategic conquering of new markets. 

Rehmann explains: “Once again we see confirmation that Apple Boss Tim Cook is successfully growing out of the legacy of Steve Jobs with strategic cooperations, and acquisitions of smaller, innovative companies.”

Investments in Apple: Premature Praise on Grounds of Good Performance in Recent Months

Apple’s good performance in recent months was already hotly anticipated. “With a growth of around 25 per cent, shares in Apple have performed significantly better than the overall market, and nearly caught up in the valuation. Even though there is still much optimism surrounding the product, middle-term growth of 12 to 15 per cent to match current valuations would seem highly unlikely based on Apple’s current profits.” This still means annual earnings growth in the region of 4 to 6 billion dollars.

Despite this, this stock retains its regular position in the GAMAX Funds Junior portfolio with an adjusted weighting, given the promising strategy and Apple’s positive long-term outlook. At a strong 4 per cent, Apple holds the second-largest position in the fund. The GAMAX Funds Junior specialises in companies which offer products and services with strong brands and a good growth outlook, and primarily appeal to young people around the world.