NEW YORK ( TheStreet) -- For consumers seeking to save money and mobile phone carriers dealing with network congestion, mobile handsets that offer Wi-Fi capabilities are increasing in popularity.

Once considered as only an add-on feature, consumers are starting to use Wi-Fi capabilities as the differentiator between mobile phone choices and are likely to remain doing so. According to a recent research report, nearly 55% of all smartphones shipped in 2009 had Wi-Fi capabilities and that is expected to jump to nearly 70% this year. Additionally, only a mere 12% of all mobile handsets sold in 2009 had Wi-Fi capabilities; this number is expected to shoot up to nearly 35% within the next few years.

Some benefits that mobile phones with Wi-Fi have are better reception and connectivity when indoors, faster download speeds and enhanced streaming quality when compared with a normal phone network. Additionally, Wi-Fi is used to make long distance phone calls via voice-over-Internet protocol and can be used as an alternate to help mobile phone carriers offload traffic on their own networks due to overloads in data use.

As the demand for smartphones continues to increase, consumption of data on mobile devices will likely follow, further pushing up the demand for Wi-Fi capabilities. In fact, this trend is so prevalent that many service-oriented chains, like McDonald's ( MCD) and Starbucks ( SBUX) offer free Wi-Fi to attract customers.

In a nutshell, the trend towards increased usage of Wi-Fi is prevalent and is expected to continue to escalate. One can capitalize on this trend through the following equities:
  • Broadband HOLDRs (BDH), which is made up companies that are in the broadband sub-sector. BDH includes Broadcomm (BRCM)and Motorola (MOT) in its top holdings, two companies expected to reap the benefits of increased Wi-Fi demand. The ETF closed at $12.01 on Thursday.
  • iShares S&P North American Networking (IGN) boasts BlackBerry maker Research In Motion (RIMM) and Juniper Networks (JNPR), which specializes in network infrastructure. IGN closed at $28.60 on Thursday.

According to the latest data at, an upward trend in the equities could come to an end at the following price points: BDH at $11.84 and IGN at $27.81.

Written by Kevin Grewal in Laguna Niguel, Calif.

At the time of publication, Grewal had no positions in any securities mentioned.
Kevin Grewal serves as the editorial director and research analyst at The ETF Institute, which is the only independent organization providing financial professionals with certification, education, and training pertaining to exchange-traded funds (ETFs). Additionally, he serves as the editorial director at where he focuses on mitigating risks and implementing exit strategies to preserve equity. Prior to this, Grewal was an analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds a bachelor's degree from the University of California along with a MBA from the California State University, Fullerton.