Allianz’s RCM Tech trust shifts from smartphones to smartphone apps

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Having sold almost of all of his positions in smartphone giants Samsung and Apple, RCM Techonolgy Trust manager Walter Price now sees the “profit pull of the future” in smartphone applications.

Price sold out of Apple almost entirely after the drop in share price earlier this year and also sold down to a minor position in Samsung, believing that the high end smartphone market had become saturated.

He also details that the trust sold most of the companies associated with both Samsung and Apple’s supply chain including its position in mobile technology company Qualcom.

However Price does not appear to be finished with the smartphone industry, opting instead to shift his focus to the businesses behind smartphone applications.

He says: “When it comes to the smart phone business the area that we have been really enthusiastic about is the applications that go on these smartphones.

“We think the big profit pull of the future is going to be taking advantage of where users spend a lot of time on their smartphones, like music, video, social networks and real estate application.”

According the latest factsheet for the trust at the end of May, internet music streaming application Pandora Media features as part of the top 10 ten holdings in the closed-ended fund.

Price stresses the opportunites for growth in this sub-sector, as the companies behind certain applications have the scope to effectively transform entire industries.

He says: “Smartphone applications for example are revolutionising the music and music advertising businesses. They are also revolutionising the video business as well. I think that there is tremendous growth in this sub-sector.”

Although the US is currently at the forefront of the smartphone application business according to Price, he also notes several other countries that are “catching up fast”, particularly in China.

He says: “E-commerce is coming to a country near you, it is happening everywhere and in some areas like China it is happening faster than the US.

“I don’t think the US has monopoly, it just got there faster. We are scouring the globe looking for companies that are at the early stages of recognising opportunities for the penetration of e-commerce.”