As technology continues to wow consumers, investors are utilizing the sectors stocks and exchange traded funds (ETFs) to fatten up their portfolios.
At its annual developer’s conference, Apple (AAPL) announced that it will be shredding the price of one of its existing iPhones to a mere $99 and unveiled a new operating system that increases data security if a phone is lost or stolen. These tactics are supposed to be used to entice business users, states the Economist.
To add to innovation releases, Palm Inc. (PALM) recently launched the Pre. This phone boasts a slick touch-screen interface and is primarily utilized with and is in direct competition with the iPhone. Granted, we are in a global recession, so what’s the hype about these new phones?
First of all, they are all not your typical cellular phone – they’re smartphones. A smartphone has all the same characteristics of a regular cell phone but they offer so much more. They enable consumers the ability to access email, the Internet, download music and practically run a business from the palm of one’s hand.
To make it even sweeter, analysts expect sales of these tech-savvy phones to grow by 27% over the next year. If this happens, it could be a boon to both telecom and technology ETFs, as many smartphone providers have deals with the big telecom companies. Apple has AT&T (T), while Palm has Sprint (S).
- Vanguard Telecom Services (VOX): up 9.2% year-to-date; AT&T is 19.5%; Sprint is 2.4%
- iShares Dow Jones U.S. Technology (IYW): up 26% year to date and above its 200 day moving average; AAPL is 7.8%
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.