Apple Takes Aim at the Smart Home: ETFs to Tap?
Apple AAPL shares climbed over 1% on Wednesday after a report said the company is preparing to make a major push into the smart home market.
According to Bloomberg’s Mark Gurman, Apple is planning an event next month where it could unveil a new smart home hub.
Apple is basically expanding its presence in the Internet of Things (IoT) market, using a new smart home hub and an upgraded Siri AI platform to connect and control devices across the home, as mentioned on Yahoo Finance.
A More Personalized Home Experience
The new hub could be placed on a countertop or mounted on a wall with an optional stand. Powered by Apple’s revamped Siri AI, it could make every day smart-home tasks more seamless.
A premium version of the new hub may feature a robotic arm for 360-degree screen rotation. This will make it easier for users to interact with the device from different parts of a room.
A New Growth Opportunity for Apple
The smart home hub move could open up another source of growth for the tech giant. Consumers already use iPads, iPhones and third-party devices to manage connected-home products, but Apple could benefit if it can offer a dedicated, tightly integrated alternative.
Note that the number of connected IoT devices has probably grown 14% in 2025 and is expected to reach 39 billion in 2030 and more than 50 billion by 2035, per IoT analytics. The data indicates the strong growth trajectory of the IoT market..
Apple Takes on Amazon and Google
Apple would be entering a market where Amazon (AMZN and Google GOOGL already have a strong presence. Amazon built an early lead with Alexa, while Google used its Assistant platform to establish its own smart home ecosystem.
Apple, however, has one major advantage: its tightly connected hardware and software ecosystem. If the new hub can seamlessly link the iPhone, Apple TV, HomePod and other devices, it could give consumers another reason to stay within Apple's ecosystem.
Note that with IoT gaining traction, thanks to several big tech companies, Internet of Things ETF SNSR should now receive a spotlight. The fund is up about 30% this year.
Should You Play Apple ETFs?
Apple stock is up about 24% and has gained about 6% over the past month. However, the stock looks pricey at the current level. The stock trades at a forward price/earnings (P/E) ratio of 37.21 times versus the industry average of 20.68X. In contrast, Apple’s IoT peers – Amazon and Alphabet – trade at a forward P/E of 18.96X and 16.59X.
Apple’s expected earnings growth is 7.57% for the September quarter while expected sales growth is 10.12%. There were no upward revisions in the Zacks Consensus Estimate for September quarter earnings over the past one month.
Hence, it is better to play Apple’s smart home news through exchange-traded funds (ETFs). The ETF approach minimizes the company-specific concentration risks. Apple-heavy ETFs include Global X PureCap MSCI Information Technology ETF GXPT, Fidelity MSCI Information Technology Index ETF FTEC, Vanguard Information Technology ETF VGT and iShares U.S. Technology ETF IYW.
Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>Apple Inc. (AAPL) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports
iShares U.S. Technology ETF (IYW): ETF Research Reports
Vanguard Information Technology Index Fund ETF Shares (VGT): ETF Research Reports
Global X Internet of Things ETF (SNSR): ETF Research Reports
Global X PureCap MSCI Information Technology ETF (GXPT): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
