Warren Buffett once said, “Don’t invest in something you don’t understand.” I beg to differ! Investors, especially older ones who struggle to understand technology, would have been shut out of the booming telecommunications sector by following Buffett’s advice.

Nothing changes faster than technology, so it is understandable why investors without technological savvy hesitate before investing in tech companies.

Today, a worldwide revolution is underway in smartphones and investors are unwise to ignore it. In the US, Europe, Asia … actually, everywhere … the smartphone is suddenly a must-have device. In the US, smartphones now account for over 50 percent of mobile phone sales. The rest of the world is not far behind.

What can smartphones do? A better question might be, what can’t they do?

It’s hard to believe, but one small, easy-to-carry device can replace older cell phones, laptop computers, cameras, calculators, GPS navigators, routers and even your wallet.

Thanks to apps and widgets, a smartphone can browse the Internet, retrieve voice mail, act as a calculator, display personal calendars, provide financial information such as stock quotes, send you alerts and notifications, download and play music and podcasts, double as an alarm clock, let you watch TV, listen to radio, read books, view videos, access social media sites, and scan QR codes. The smartphone is even on track to replace money and credit cards.

It’s not surprising that all over the world, people suddenly want these devices.

A Trio of Smart Plays

Three large companies are leading the smartphone charge: Apple (NasdaqGS: AAPL), Google (NasdaqGS: GOOG), and Samsung Electronics (OTC: SSNLF). All are huge, highly profitable firms.

Credible competition is, at least at this point, non-existent. Research in Motion (NasdaqGS: RIMM) is on the rocks. Microsoft (NasdaqGS: MSFT) and Nokia (NYSE: NOK) are scrambling to catch up.

Here’s a look at our favorite smartphone-related stocks.

Apple

Apple, an almost pure play on mobile and computing devices (iPhones, iPads and iPods) has had astounding success in the last few years, enriching thousands of investors. With a market cap of $620 billion, the company is now the largest in the world and still growing rapidly.

A quick glance at key statistics says it all. Apple boasts annual revenue growth so far this year of greater than 20 percent, has no debt and the stock now pays a dividend. Apple may have a $200 billion cash hoard by the end of next year as profits flood in.

With the much-anticipated release of the iPhone 5 in September, both revenue and earnings will likely (once again) be goosed upward. What’s not to like about this extraordinary company? Buy up to 750.

Google

Smartphones, of course, are only part of Google’s business. Most of the company’s revenue (up 35 percent so far this year) comes from Internet search advertising.

But here’s the key: Google, anticipating the transition to mobile computing, developed the Android operating system as an alternative to Apple’s iOS. Earlier this year, Google acquired cell phone manufacturer Motorola. Android, now on 68 percent of smartphones worldwide, has paid off handsomely for Google.

Increasing numbers of mobile users may continue to drive Google’s revenues up at a torrid pace. Some estimates have Google’s mobile ad revenue surging to $5.8 billion in 2012. Buy up to 800.

Samsung Electronics

South Korea-based Samsung Electronics is the world’s largest smartphone manufacturer. While Apple dominates US markets, Samsung dominates most markets in the rest of the world.

As with Google, Samsung is much more than mobile devices. The company manufactures, distributes and sells a diverse array of electronic products including personal computers, smartphones, tablets, digital cameras, TVs, DVD players, appliances, and more.

Samsung’s financials are stellar: Revenue growth exceeded 20 percent last year. The company’s trailing price-to-earnings (P/E) ratio is only 12 (compared to about 15 for its industry) and the company has over $20 billion cash in the till.

Unfortunately, it is difficult for US investors to buy shares in this highly successful, $182 billion company. You can buy directly on the South Korean, London or German exchanges if you have the right brokerage connections. If not, you are limited to the high-priced ($1,200 per share), low-volume OTC SSNLF symbol.

We recommend buying the iShares MSCI South Korea Index (NYSE: EWY) exchange-traded fund. Samsung is 23 percent of EWY’s holdings.

What do you think of this article? Please post your feedback in the “comments” section below!

Bruce Vanderveen is a Florida-based financial writer and investor.