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By now everyone here and around the world is familiar with the incredible story of Research in Motion Ltd. (RIMM), the creator of the iconic family of BlackBerry smart phones with its best-known user currently occupying the White House. I'm certain most of our readers either have a BlackBerry or know someone who does. Then there are the competitors such as the Apple (NASDAQ:AAPL) iPhone, the new Palm (PALM) Pre, and the Motorola (MOT) Droid.

Smart phones are among the most popular and profitable electronic devices of our time and that trend shows no signs of slowing. Incredibly, it's only in the last few weeks that both Apple and Research in Motion have announced that their products are going to be available for the first time in China. The potential sales growth opportunity there is hard to quantify. However, research firm IDC predicts that smart phone sales in China should grow from 11 million currently to 35 million in 2013.

Interestingly, initial sales for the iPhone have been somewhat lackluster in China because the Chinese have so far not taken to the QWERTY keyboard. So it will be interesting to see how long it takes for BlackBerry gain real traction there.

Anyone who has been investing in RIM and Apple over the past few years has done very well. Of course, there have been occasional pullbacks; in fact Research in Motion took a big drop in the autumn although it has bounced back recently. The competition within the sector has been heating up and so it may be that, although the growth story is far from over, some of the profit margins will begin to get a little skinnier for the manufacturers of handsets.

Another way to play this sector has been through the carriers themselves: Verizon (NYSE:VZ) and AT&T (NYSE:T) in America or Rogers Communications and Telus in Canada. And the big Telcos in the U.S. are paying healthy dividends at the moment so Verizon and AT&T are still worth a look. Also, there is an option in China through China Mobile (NYSE:CHL).

But there is another way to capitalize on the explosion of smart phones around the world. That is to invest in the suppliers to the handset makers themselves. I'm thinking here of chipmakers like Qualcomm (NASDAQ:QCOM) which, along with Samsung, supplies Apple with chips for the iPhone.

Qualcomm is not just a supplier to the iPhone but they have a broad-based offering of chips for the wireless industry including an enterprise services division that provides satellite and terrestrial-based two-way data messaging. The one downside of the company is that they support the CDMA-based wireless system which is only used extensively in the United States and some parts of China and Japan whereas the rest of the world has gone to the GSM format.

Another big supplier to the smart phone group is Jabil Circuit Inc. (NYSE:JBL), which is a manufacturing outsourcing company with a global production footprint. They are an end-to-end manufacturing solution company operating from the design phase through production and product management stages. Their customer base includes some of the giants of the industry such as Nokia (NYSE:NOK).

JBL has 85,000 employees with manufacturing operations in 22 countries. For the recently-concluded 2009 fiscal year, the company reported $11.7 billion in revenue (figures in U.S. dollars). Of course, revenues were down somewhat year-over-year but the company is well financed and should bounce back nicely once we put all this drama behind us.

Although mobile phones are an important area of business, this company is nicely diversified. They also have automotive customers, general computing and storage customers, along with medical instrumentation networking and telecommunications. The company produces printed circuit boards that can work in a number of the handsets.

Another company that does many of the same things is Multi-Fineline Electronics (NASDAQ:MFLX). It is smaller than Jabil with approximately 17,000 full-time employees but has a very similar profile, manufacturing circuit boards for numerous devices. Recently the company reported strong quarterly results and they appear well on their way to recovery. Both stocks are well off their lows but have pulled back recently so this should be a good time to establish a position.

Finally, another name you could consider is Texas Instruments (NASDAQ:TXN), which recently reported decent earnings although the market was somewhat disappointed and knocked the stock back a little. This is a large, well-diversified company that in addition to designing semiconductors also produces a broad range of electronic devices such as power management semiconductors and applications processors. In fact, they make the application processor for the Palm Pre device which has been doing fairly well. Of course they continue to be famous for making those well-known calculators that engineering students carry around campuses around the world. TXN also makes semiconductor products that are used in HD televisions and movie projectors so you're getting a well diversified electronics business that has a good stake in the mobile handset world.

If you want to pick one of the above to add to your portfolio, my choice would be Jabil, which was just upgraded to a buy by Merrill Lynch. It's got a good balance sheet, reasonable valuation, and the stock hasn't moved up as much as the rest of this group. But there is safety in numbers so, if you prefer, put together a small basket of these stocks to protect yourself from crazy swings in any particular company.

Action now: Buy JBL at $14.06 and be ready to ring up some profits in the New Year.

Disclosure: long JBL

Source: Several Ways to Play RIM