Apple’s upcoming iPhone 8 and (possibly) self-driving cars are the best bet for 2017, according to Taiwan’s top-performing technology fund, Allianz Global Investors. Upbeat expectations about iPhone orders, which are fueling earnings at the island’s suppliers, have taken Taiwan’s benchmark index to an 18-month high, according to Bloomberg.
iPhone is a major growth story in Taiwan
Bloomberg noted that foreign investors have invested $1.5 billion in local stocks this year, the most among Asian markets.
Peter Liao, fund manager at Allianz Global Investors Taiwan Ltd, said, “The biggest theme this year will be the iPhone.”
Liao talked about the companies (without naming the firms) that make supportive wireless charging and augmented reality. These features could be in the next iPhone 8.
Liao’s Allianz Global Investors Taiwan Technology Fund posted a total return of 28% in the past 12 months, outperforming its peers and posting gains of almost twice the Taiex’s 17% gain. The fund has invested the most in Taiwan’s Semiconductor Manufacturing Co., Largan Precision Co. and Hon Hai Precision Industry Co, notes Bloomberg. All are suppliers for Apple.
Taiwan’s exports surged on the back of the iPhone 7 release last year. After 17 months of declines in shipments, they surged at the fastest pace since 2013. Industrial production has been reviving in the past year as well. On the other hand, equity inflows have also supported the Taiwan dollar, which sprinted 4.5% against the greenback this year.
The fund also has big holdings in Tong Hsing Electronic Industries Ltd, which manufactures products that can be used in self-driving car systems. Liao believes there is a lot of scope for improvement in this technology, such as impact prevention.
Apple faces stiff competition from Android rivals
Meanwhile, Apple is getting competition from the likes of Google, the company that unseated it in as the world’s most valuable brand. Experts believe that Apple has reached a “brand saturation point.” Even though the company wants to revamp the design of the iPhone to retain customers, it will be quite a task, as Apple will face competition from major Android manufacturers such as Samsung, Google and Huawei.
Recently, Forbes’ Ewan Spence made a valid point when he said that the phone parts that go into making iPhones have become obsolete in supply chains. Various parts such as memory chips and camera hardware are quite common, making the road ahead for phone manufacturers difficult.
