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TheStreet Open House

ETFs Dial In for Smartphone Growth

Stocks in this article: IGN MOT RIMM CSCO EWT TSM

NEW YORK ( TheStreet) - There are a variety of different ways ETF investors to gain access to the forecasted growth of the smartphone industry.

The current handheld devices offered by companies such as Research in Motion (RIMM), Apple (AAPL) and Motorola (MOT) bear little resemblance to the cell phones of the past.

Whereas these gadgets were once used to mainly stay in contact with friends and loved ones through phone calls and texts, consumers are increasingly turning to their iPhones, Droids, and Blackberry devices to connect with the world around them, surf the Internet, play games, check email, and keep a constant eye on work.

Given the diverse capabilities of today's smartphones and our increasing desire to stay constantly connected with the world, it is no wonder that demand for these gadgets is strong and only expected to increase.

In a report for Fortune, reporter Seth Weintraub predicts that there is a chance that we will see half a billion phones sold around the world in 2011. Further, the author predicts that smartphones will surpass traditional computers next year as the No. 1 way consumers connect to the Internet.

Rampant growth in this sector will bode well for companies such as RIM, Google (GOOG), Apple, and Motorola. Additionally, wireless service providers such as Verizon (VZ) and AT&T (T) should benefit as more consumers abandon their landlines in favor of more expensive data plans.

Finally, the companies responsible for producing the internal components of these products look primed for growth as well.

The body of companies which will benefit as the smartphone revolution takes hold is vast. Therefore, rather than viewing the industry through a stock picking perspective, investors may find a diversified ETF the best suited product for taking on the sector as a whole.

The iShares S&P North American Technology-Multimedia Networking Index Fund (IGN) tracks a basket of over 30 different companies. Among the fund's components lays a bevy of technology-related firms which have become household names in the smartphone industry. Some of the companies headlining the fund's index are names such as RIM, Motorola, Cisco (CSCO - Get Report) and Qualcomm (QCOM).

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