Smartphones account for only 11 percent of handsets globally, and penetration is under 20 percent in the US. As the economic crisis deepened last year, the global smartphone market still grew 22 percent. Meanwhile, a recent report issued by Goldman Sachs (NYSE: GS) projects the market will increase 12 percent next year and peak at 29 percent growth in 2012.

As commerce continues to become more global with transactions spanning numerous time zones and countries, businesses view smartphones as a productivity-enhancing device–many workers are essentially on-call 24 hours a day. Although concrete data is hard to come by, some estimate that more than a third of smartphones in use are employer-issued. But for the phones to be useful to companies, they must run the applications that businesses need.

Sybase (NYSE: SY) has made its business the management and mobilization of information.

In the mid-1990s Sybase launched its iAnywhere Mobile Office, which offered secure access to email, calendars and other basic utilities through a handful of devices. From these humble beginnings, the range of functions has expanded dramatically.

In 2006, the company acquired mobile messaging outfit Mobile 365 and its 40 percent market share for $148 million. At the time, many analysts felt that the acquisition was misguided and diverted the company’s attention from its core database business. This gutsy move invigorated

Sybase’s mobile software and messaging business; the segment now accounts for about a quarter of the company’s revenues.

Under that banner, Sybase includes its mobile banking line, which allows consumers to access their bank accounts from almost any mobile device, as well as its AvantGo business, which optimizes and delivers websites to smartphones.

One of Sybase’s most compelling projects is a suite of applications that will allow users to make payments from mobile devices. Although a number of established companies already offer this service, these products remain in their infancy outside Asia; Sybase’s unique combination of services gives it a strong competitive position.

And its established database-management business provides a steady and recurring revenue stream that buoys earnings and helps fund the company’s substantial research and development operations. Not only is it expensive and time consuming for businesses to switch database providers, but IT spending is also forecast to decline only 5 percent this year despite the weak economy.

Another major plus for the company is that it works with traditional software providers to develop mobile versions of their products. For instance, Sybase recently partnered with SAP (NYSE: SAP), the world’s leading provider of business software, to port several of its products into mobile applications.

Sybase’s diversified product offerings and global customer base have enabled the company to grow earnings in each of the past five years. And 2009 should be no exception. Despite a weaker-than-usual first half, full-year earnings per share are expected to clock in at $2.28, a 5.6 percent increase over 2008.

Given the diversity of Sybase’s products and services, the stock is an excellent way to play the increasing prevalence of smartphones.

WHY TO BUY
SYBASE (NYSE: SY, $35.42)
• Diversified business lines provide earnings stability
• Big spender on R&D
• Recently closed several deals to include its messaging platform on new devices