Investing in Smartphones

What are Smartphones?

Smartphones have changed how we think, how we interact, and how we meet our needs, from getting groceries to finding directions to meeting our future mate. Investors who want to invest in smartphones can go for big names like Apple or Google—or start with a simple search like “invest in smartphones” to get a range of investment opportunities.

From instant news updates to social media to checking our phones countless times each day out of habit—smartphones help us do this because they perform many of the functions of a computer, with a touchscreen interface, internet access and an operating system that can download and run applications. iOS, Android, Windows, and other platforms support apps, many of the third-party, that help transform a phone into a TV, a dictionary, an investing platform, and more.

Changing the world by the numbers

Interest in smartphones took off when the iPhone launched in 2007, but the iPhone didn’t change the world on its own. The first iPhones cost between $399 and $599, which at the time was a large premium. Androids played an important role in bringing the price of smartphones down. In 2008, after the launch of the iPhone, HTC’s T-Mobile G1 launched for a price tag of $179. This price drop, along with other factors (including a data price drop, better apps, and better camera technology), helped to make smartphones more accessible and ubiquitous globally.

The pandemic of 2020 prompted a surge of demand on cellular networks—accelerating the need for digital connectedness, making smartphones more vital than ever. Today, 86 percent of the world own smartphones and use them a lot (1). More than half of web traffic worldwide is mobile, in fact. Over the past decade, the use of mobile phones surged from generating nearly 11 percent to 60 percent of all web traffic (2). Worldwide, there are nearly 7 billion smartphone users. That number is predicted to grow by several hundred million in the next few years. China, India, and the US are home to the highest number of smartphone users, at 918 million (China), 270 million (US) and 439 million (India) (3).

In 2020, the global smartphone market was valued at $714.96 billion. It is expected to surpass $1 trillion by 2026 (4). Yet as essential as smartphones have become for many, uncertain economic times and supply chain issues have taken their toll on the market. With interest rate hikes, lockdowns in China slowing its economy, and the specter of global recession refusing to go away, it’s no wonder that the smartphone market sagged a bit in 2022. But mobile technology isn’t done yet. From a wide rollout of 5G to foldable phones and stretchable screens, the world of smartphones has new opportunities on the horizon.

Why Invest in Smartphones

It might seem that the smartphone market is tapped, but lots of growth potential exists.

Invest in smartphones—stocks or funds. Investing in smartphones isn’t limited to investing in Apple shares. Today, the leading smartphone companies include Samsung and Apple, neck-and-neck competitors who have been leading the market since 2013 and who together make up more than half the market worldwide (5). Other smartphone makers in the news and at the top of the markets include Xiaomi, Huawei, Google, LG, and Motorola. These are big companies, with big share prices, but many mutual funds and ETFs can expose investors to the tech gadgets they love—without breaking the bank (6).

Smartphone investing search tip #1: Investors who want to invest in their favorite mobile phone can easily check its current price and dividend information.

• For example, on Magnifi the search “invest in Apple” will bring up the familiar Apple logo, as well as (after a click or tap on the name) the price of the share and useful information for investors, like its dividend yield and market cap.

Invest in technology. Networks are going 5G, and that takes specialized mobile technology. Chips are required in almost anything powered by software (including smartphones, cars, laptops, PCs, video games, and data centers), and after sinking a bit during the pandemic, chip makers have started ramping up again—sometimes helped by government-funded incentives. For example, in the US, where the shortage of chips in 2021 constrained US economic growth by nearly a quarter trillion dollars, 2022’s The CHIPS and Science Act directs hundreds of billions of dollars into jumpstarting domestic semiconductor manufacturing. It’s predicted that the demand for semiconductors will gain traction, and so companies will gear up, becoming a $1 trillion industry by 2030 (7).

Smartphone investing search tip #2: See supply chain problems in the news? It’s always worth checking how this could affect semiconductor companies you are investing in.

• For example, there’s a good chance your smartphone uses Qualcomm’s Snapdragon chipset. A search for Qualcomm Incorporated on Magnifi shows the stock and also lists mutual funds and ETFs focused on semiconductors, robotics, and wireless that include this company, in varying percentages. Clicking on the name of the stock will take you to a chart of its returns—and you can see for yourself how the stock is doing, and whether its returns and risks fit your goals.

Invest in apps. Connection, self-expression, and personalization in the digital age relies on apps, and on Google’s Play Store and Apple’s App Store, for example, there are millions of apps to choose from. In 2022, even when people are wary about spending more of their hard earned money, they swarmed to download popular apps like TikTok (672 million), Instagram (548 million), and WhatsApp (424 million), with a new video editing company (thanks to TikTok popularity) breaking into the competition: CapCut (357 million) (8). Beyond gaming and dating, entertainment apps like HBO Max and Disney+, finance and communication apps (for platforms like Zoom) are growing too. With so many choices, investors don’t need to miss this boat.

Smartphone investing search tip #3: Investors who want to see how the big companies are weathering the ups and downs of the markets can check the stock returns over time.

• On Magnifi, “invest in Google” will bring up its parent company, Alphabet. A click or tap on its name will show how this company did over the past few years. But searches find more than stocks. A search for Amazon displays the company’s stock as well as funds that are focused on retail, track the S&P 500, etc.

Beyond new networks, cellphones themselves aren’t done innovating just yet. Foldable phones, stretchable and rollable displays, cameras and more will keep upping their capacity and features and bringing new opportunities to investors.

How to Invest in Smartphones

Smartphones are part of a huge web of investment opportunities - from mobile apps to 5G networks to chipmakers. Narrowing in on the investments that interest you starts with a search:

• Invest in smartphones
• Invest in smartphones and chipmakers
• Invest in google and apple

References:

1. “How many smartphones are there in the world?,” accessed January 9, 2023, bankmycell.com, https://www.bankmycell.com/blog/how-many-phones-are-in-the-world.
2. “What percentage of internet traffic is mobile?,” accessed January 9, 2023, Oberlo.com, https://www.oberlo.com/statistics/mobile-internet-traffic.
3. “How many smartphones are there in the world?”
4. “Smartphones Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028), accessed January 9, 2023, MordorIntelligence.com, https://www.mordorintelligence.com/industry-reports/smartphones-market.
5. “Smartphone Market Share Worldwide,” accessed January 9, 2023, Oberlo,com, https://www.oberlo.com/statistics/smartphone-market-share.
6. Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
7. “The CHIPS and Science Act: Here’s what’s in it,” October 4, 2022, McKinsey & Company., https://www.mckinsey.com/industries/public-and-social-sector/our-insights/the-chips-and-science-act-heres-whats-in-it.
8. Koetsier, John, “10 Most Downloaded Apps Of 2022: Facebook Down, Spotify Up, TikTok Stable, CapCut Keeps Growing,” January 4, 2023, Forbes.com, https://www.forbes.com/sites/johnkoetsier/2023/01/04/top-10-most-downloaded-apps-of-2022-facebook-down-spotify-up-tiktok-stable-capcut-keeps-growing/?sh=20a7cd8c21cc.