2 ETFs for Smartphone Boom

NEW YORK ( TheStreet) -- Just months after South Korea's Samsung Electronics dethroned Apple ( AAPL) to become king of the global smartphone industry, the Cupertino, California-based tech giant has staged a comeback that has allowed it to regain the crown. The ongoing contest to rule this corner of the technology industry is exciting to watch and for ETF investors, it may prove alluring.

A record-breaking earnings showing in late January has played a major role in propelling Apple's stock price though the closely watch $500 level. Initially following the release of this report, analysts, market commentators, and investors dug through and concluded that the popularity of the firm's iconic iPhone was a major contributor to the standout showing. Combined with its newest version, the iPhone 4S, Apple reportedly sold over 35 million smartphones during the quarter.

This statistic is impressive and really shines when compared to the sales figures seen from its closest competitor, Samsung, which recently unveiled its own quarterly performance numbers and, while it beat expectations, its smartphone sales fell short of Apple's. In total, the company, which is responsible for such phones as the Google ( GOOG) Android-powered Galaxy Nexus and the Microsoft ( MSFT) Windows OS-backed Samsung Focus saw 34 million units flew off the shelves.

Apple and Samsung are not only driving forces in the smartphone industry. They are also major holdings within a number of exchange traded products. For investors looking to secure a front row seat to observe the ongoing smartphone game of thrones, it would be worth keeping Apple- and Samsung-heavy products on the radar.

On top of being a popular choice among investors looking to gain a strong footing in the tech sector, the PowerShares QQQ Portfolio ( QQQ) is also a top choice for Apple enthusiasts. With over 15% of its portfolio dedicated to the Apple, QQQ's short and long term performance will hinge heavily on whether the consumer tech giant can stay a stock market favorite.

Samsung Electronic's strength can meanwhile be captured using the iShares MSCI South Korea Index Fund ( EWY), which is designed to target the largest and most recognizable names hailing from this popular Asian nation in order to provide investors with expansive exposure to its economy. Samsung dominates the index, accounting for nearly one-fifth of the fund's assets.

As these two smartphone titans continue to duke it out, stock traders may be tempted to try and pick favorites. However, due to the specific focus of QQQ and EWY, long-term minded ETF investors can have it both ways.

Apple may dominate QQQ's index, but the fund has proved in the past to be an attractive option and suitable choice for those looking to construct a solid core. At this time, I hold the fund in a number of my client portfolios. Meanwhile, when used in small doses, EWY can be a suitable tactical holding when attempting to take aim at stable members of the developing world.

With smartphones becoming increasingly engrained into our everyday lives, companies like Apple, Samsung, Google, and Microsoft appear to be in a strong position to benefit. Utilizing ETFs, it is possible to follow this exciting development while, at the same time maintaining a well-balanced portfolio.

Written by Don Dion in Williamstown, Mass.


At the time of publication, Dion Money Management owned the PowerShares QQQ Portfolio.