Mobile sales to hit a billion per year by 2009

Sales of mobile phones are on pace to reach a billion annually by the end of the decade, when nearly 40 per cent of the world's population will own a mobile handset, according to a Gartner report.

Asian countries will continue to play a major role in increasing the number of mobile phones in circulation to 2.6 billion by 2009, the research firm estimated in the report, released on Tuesday. Currently, 25 per cent of all mobiles are sold in Asian countries. By decade's end that number will be one in three, Gartner analysts said.

Overall, the findings bolster the mobile phone's status as the world's most popular electronic device. Mobile handsets have already eclipsed cameras, personal computers and even traditional landline phones in sales.

Gartner's predictions come with an important caveat: Wholesale prices for handsets have to decrease from an average of about $174 each in 2004 to about $161 by 2009. In the US, especially, handsets are typically discounted so heavily that they end up costing consumers nothing. Operators can only afford to continue to do that, and keep sales growing, if the price they pay for each one drops.

While Asia is taking the lead, the sales pace is a global phenomenon, whether it's in Latin America or China - where mobile phones are a relatively new phenomenon - or in European countries saturated by phones and where replacement sales will flourish, Gartner said.

"The sales volume can't be attributed to one region in particular," wrote Carolina Milanesi, Gartner's principal handset analyst. "It's a truly global phenomenon."

Gartner also noted that sales of smart phones, mobiles that pack more advanced features, will represent about one-fifth of all mobile handset sales by 2008. That's good news for the likes of Symbian, Microsoft and other mobile phone operating system makers, which are banking on the smart phone market taking off.

Ben Charny writes for CNET News.com.