Smartphone Wars: Investing In Either The Apple iPhone or Google Android With ETFs (AAPL, GOOG, QQQQ, FDN)

“The effort to bring the fastest, most satisfying user experience to smartphones has pit company against company and consumer against consumer. Today, one of the most covered wars raging in that industry is between tech goliaths Google (Nasdaq:GOOG) and Apple Inc. (Nasdaq:AAPL). Last Friday Apple’s (Nasdaq:AAPL) CEO Steve Jobs took to the stage to defend his newest “trendsetter,” the developmentally challenged iPhone 4. Since the launch of the phone, it has faced massive criticism regarding its antenna. Technology journalists, bloggers, and consumers have taken to various media outlets to claim that its unique design has led to reception issues and even an increase in dropped calls. As I, like many others, followed the live feeds hosted by a number of tech blogs, I was reminded once again how essential smartphones have become to our everyday lives,” Don Dion Reports From Dion Money Management.

Dion goes on to say, “In a relatively short period of time, the cell phone, which was once used to stay in contact with friends and family, has evolved into the smartphone. These mobile devices have moved beyond the business realm and into the general public. Equipped with an iPhone, Blackberry or Droid phone, consumers can not only make phone calls around the world, but also text, play games, watch and send movies, and keep up to speed with the fast paced world around us. In one corner of this competitive landscape is the Apple iPhone. Since its early 2007 debut, Apple’s iPhone has taken the mobile market by storm and is currently hailed by many as the gold standard in the smart phone industry. Although flaws concerning the phone’s most recent design have been noted, it has not stifled growth of the product’s fan base. Although it has been available for less than a month, more than 3 million users have already jumped in line to purchase the fourth- generation version of the phone.”

“In the opposite corner is Google (Nasdaq:GOOG). This search company is parent to the Android operating system, which is quickly gaining ground on Apple (Nasdaq:AAPL). Unlike Apple (Nasdaq:AAPL), which continues to rely solely on the iPhone for its smartphone dominance, Google’s Android operating system can be found on phones hailing from a number of other companies around the world, including Motorola (Nasdaq:MOT), HTC and Samsung. Even China, which has recently been at odds with Google (Nasdaq:GOOG) over its censorship, appears to be warming up to the company’s operating system. Despite not seeing eye to eye, China has incrementally sanctioned Android handhelds, which have hit the Chinese market in droves”

“ETF investors confident of Apple’s sustained market dominance may find the PowerShares QQQ (Nasdaq:QQQQ) attractive. Apple represents the single largest chunk of this fund, making up nearly 20% of its portfolio. On the other hand, the First Trust Dow Jones Internet Index ETF (NYSE:FDN) can be seen as the best ETF play for investors forecasting global Android dominance. Google (Nasdaq:GOOG) represents close to 10% of the fund’s index, making the search giant its largest holding. While determining the outcome of this heated battle using ETFs can be exciting, it can also lead to shortcomings. Both (Nasdaq:QQQQ) and (Nasdaq:FDN) have their own unique strengths beyond (Nasdaq:GOOG) and (Nasdaq:AAPL) and together can provide broad exposure to a diverse collection of top technology players. Therefore, rather than picking either (Nasdaq:FDN) or (Nasdaq:QQQQ) based on personal smartphone preference, investors may instead want to hold both as a general play on the technology industry,” Dion Reports.

Here is a closer look at the PowerShares QQQ Trust ETF (NASDAQ:QQQQ) and the First Trust Dow Jones Internet Index ETF (NYSE:FDN) below:

PowerShares QQQ Trust ETF (Nasdaq:QQQQ) Visit Our (QQQQ) Category: HERE

The investment is a unit investment trust designed to correspond generally to the performance, before fees and expenses, of the Nasdaq-100 index. The fund holds all the stocks in the Nasdaq-100 index, which consists of the largest non-financial securities listed on the Nasdaq Stock Market. The fund issues and redeems shares of Nasdaq-100 Index Tracking Stock in multiples of 50,000 in exchange for the stocks in the Nasdaq-100 and cash.

TOP 10 HOLDINGS (46.89% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Amazon.com, Inc. (AMZN) 2.26
Apple Inc. (AAPL) 15.50
Cisco Systems, Inc. (CSCO) 2.88
Google Inc. (GOOG) 5.36
Intel Corporation (INTC) 2.31
Microsoft Corporation (MSFT) 5.45
Oracle Corporation (ORCL) 3.00
QUALCOMM Incorporated (QCOM) 5.45
Research In Motion Limited (RIMM) 2.25
Teva Pharmaceutical Industries (TEVA) 2.43

First Trust Dow Jones Internet Index (Nasdaq:FDN)  Visit Our (FDN) Category: HERE

The investment seeks to track the price and yield performance, before fees and expenses, of the Dow Jones Internet Composite index. The fund normally invests at least 90% of assets in stocks that comprise the index. The index is designed to include only companies whose primary focus is Internet-related. To be eligible for inclusion in the index a company must generate at least 50% of revenues from Internet commerce or services and must be currently included in the Dow Jones U.S. index. The fund is nondiversified.

TOP 10 HOLDINGS (49.37% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Amazon.com, Inc. (AMZN) 6.63
Check Point Software Technologi (CHKP) 3.20
eBay Inc. (EBAY) 5.78
Expedia, Inc. (EXPE) 3.10
Google Inc. (GOOG) 9.95
Juniper Networks, Inc. Common S (JNPR) 4.42
priceline.com Incorporated (PCLN) 3.82
Salesforce.com Inc Common Stock (CRM) 3.84
VeriSign, Inc. (VRSN) 3.10
Yahoo! Inc. (YHOO) 5.53

Chart forPowerShares QQQ (QQQQ)

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