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Smartphones have changed the fabric of our lives. From instant news updates, to social media, to checking our phones countless times each day out of habit— they 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).

In 2020, the global smartphone market was valued at $714.96 billion. It is expected to surpass $1 trillion by 2026. While it is expected that the market will plateau because of sheer penetration, mobile technology isn’t done yet.  From a wide rollout of 5G to foldable phones, the world of smartphones has new opportunities on the horizon. 

Interestingly, the pandemic of 2020 increased the demand on cellular networks. According to Ericsson, the number of mobile 5G subscriptions in North America will reach 325 million. That’s compared to 3 million in 2019.

In other words, it accelerated the need for digital connectedness, making smartphones more vital than ever. 

What Is a Smartphone?

A smartphone is “a mobile phone that performs many of the functions of a computer, typically having a touchscreen interface, internet access, and an operating system capable of running downloaded applications,” according to the Oxford dictionary. 

While the iPhone launched in 2007, 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, in conjunction with other factors (including a data price drop, better apps, and better camera technology), helped to make smartphones more accessible and ubiquitous globally.

Today, 91 percent of US households own smartphones and use them a lot. Approximately half of web traffic worldwide is mobile, in fact. In the third quarter of 2020, alone, mobile devices (not including tablets) generated 50.81 percent of global website traffic.

Worldwide, there are more than three billion smartphone users. That number is predicted to grow by several hundred million in the next few years. With more than 100 million users each, China, India, and the US are home to the highest number of smartphone users.

Why Invest in Smartphones?

While it might seem that the smartphone market is tapped, lots of growth potential exists. 

First, investing in smartphones isn’t limited to investing in Apple shares. Today, the leading smartphone companies include Samsung, Apple, and Huawei Technologies. These three technology companies sell about half of all smartphones worldwide. While all three shipped at least 200 million smartphones in 2018, Samsung outsold the other two competitors, selling more than 290 million smartphones. Other smartphone makers include Google, LG, Motorola, Vivo Communication and Xiaomi.

Networks are also getting better by going 5G, and that takes equipment. 

5G chip makers include Qorvo, whose “revenue for the third quarter of fiscal 2021 increased 26 percent year over year to nearly $1.1 billion.” Its shares nearly doubled, from $1.86 per share a year ago to $3.08 per share at the end of the year. The company expects that 2021 might be an even better year, estimating that 500 million 5G smartphones could be sold in 2021, compared to just 250 million units in 2020. 

Chips are required in almost anything powered by software (including smartphones, cars, laptops, PCs, video games and data centers), and they are seeing more demand than ever. Alternatively, instead of choosing a particular chip company, semiconductor ETFs are also available. 

Beyond new networks, cellphones themselves aren’t done innovating just yet. 

These days, foldable phones are on the horizon. Foldable phones can adjust their size to meet the user’s need—making it larger to function more like a tablet, or smaller to function more like a mobile phone. 

While foldables are on the market (Royole introduced the first foldable phone, the FlexPai, in October 2018, and Samsung has since released three, and Motorola recently released one), they haven’t arrived or been adopted in full force. 

And, what would our phones be without the apps we rely on? 

Google’s Play Store is home to nearly 3 million apps and Apple’s App Store is home to nearly 2 million apps. Consumer spending on app stores on these two platforms and third-party app stores hit $143 billion in 2020. The dating app Tinder alone grossed $33.86 million and the gaming app Monster Strike grossed $28.92 million. That’s a lot of revenue generated by tiny little display squares. 

Beyond gaming and dating, finance and communication apps (for platforms like Zoom) are growing too. Investors aren’t missing the boat. Between 2016 and 2020, global funding to mobile technology companies more than doubled compared to the previous five years.

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The information and data are as of the March 16 ,2021 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.

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