ETFs To Play The Apple Tablet

By Kevin Grewal  

This week’s launch and release of Apple’s (AAPL) tablet device is expected to do to media what iTunes did to music and the iPhone did to telecommunications. 

Apple CEO, Steve Jobs, expects the tablet to bring great leaps of innovation to the media industry by repackaging and reselling media content.  In fact, the new device aims to bring media efficiency to homes by enabling  multiple users to read news, watch television and read emails. 

According to the Wall Street Journal, Apple has been in negotiations with television networks like Walt Disney (DIS) and CBS Corp. (CBS) to come up with a monthly TV subscription service.  Additionally, the company has been in talks with the New York Times (NYT) and NewsCorp (NWSA) to ink a publishing deal regarding books, newspapers and magazines.

On the positive side, Apple is no stranger to devising new ways to access and pay for quality content.  Recently, Apple’s iTunes became the largest retail music provider as quarterly revenues derived from the iTunes Store has more than quadrupled in the past four years.  Additionally, Apple’s latest earnings report beat Wall Street’s expectations showing record revenues and a huge uptick in iPhone sales.  With this in mind, it is likely that the Tablet will revolutionalize and reshape the media industry and further bolster revenue at the innovative company.

Apple will likely face some of the same obstacles and hurdles that it did with the music industry and will have to demonstrate a consumer need for the Tablet.   Additionally, some technology experts suggest that lack of eBooks, which is found on Amazon’s (AMZN) Kindle, could potentially deter a significant number of users.  At the end of the day, with the right price point, Apple will likely overcome these obstacles and users will be driven to the Tablet’s ability to increase efficiency.

For ETF investors, Apple can be accessed through the following funds:

  • the iShares Dow Jones US Technology (IYW), which allocates 9.43% of its assets to Apple closed at $55.07 on Monday.
  • the Technology Select Sector SPDR (XLK), which allocates 8.3% of its assets to Apple, closed at $21.84 on Monday
  • the iShares S&P North Amer Technology (IGM), which allocates 7.54% of its assets to Apple and closed at $51.79 on Monday.

When investing in these ETFs, it is important to keep in mind the inherent risks that are involved.  To help mitigate these risks, the use of an of an exit strategy which triggers price points which represent abnormal price weaknesses and an increased likelihood that further price weaknesses in these ETFs are likely to follow is of importance. 

According to www.SmartStops.net, the price points for the previously mentioned ETFs are: IYW at $53.92; XLK at $21.39; IGM at $50.78.  These price points fluctuate on a daily basis and are reflective of market conditions and volatility. Updated data can be found at www.SmartStops.net.  These price points change on a daily basis as market conditions fluctuate and updated data can be accessed at www.SmartStops.net.

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