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) and Qualcomm ( QCOM).
In 2010, IGN's concentrated investing strategy has paid off. The fund has jumped 25% this year, beating out tech-focused funds with a broader reach such as the PowerShares QQQ ( QQQQ). Investors can access the smartphone industry through an international lens as well. A number of companies outside of the U.S. have a direct impact on the production of these popular gadgets and will thrive as they increasingly become staples of our everyday business and social lives. The iShares MSCI Taiwan Index Fund ( EWT) is one of the best international ETFs for following smartphone growth. Although the fund is designed to capture the strength of the broad Taiwanese economy, its performance is heavily reliant on the performance of the information technology sector. Companies including Taiwan Semiconductor Manufacturing ( TSM), Hon Hai Precision, and HTC represent the fund's top three positions and make up a combined 26% of the fund's total index. All three play an essential role in creating various smartphone components and models. The smartphone industry looks promising and will likely be an exciting region of the market to watch in 2011. By utilizing funds such as IGN and EWT, investors can gain a front row seat to the sector's growth, and profit as more people around the world turn to these gadgets to stay connected. Written by Don Dion in Williamstown, Mass.
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