Wi-fi mobiles to be flying high by 2010?

Sales of mobile phones with both cellular and wi-fi capability will be booming by 2010, according to a study by market research company In-Stat.

Wi-fi is widely used by consumers to connect their PCs and certain handheld devices to the internet but until very recently wi-fi has been absent from the world of mobile phones.

Cellular service providers initially saw wi-fi as a threat to sales of cellular data services such as weather reports and stock quotes. But this perception is changing rapidly, according to In-Stat's research, as service providers acknowledge the marketability of phones capable of handling both cellular and wi-fi signals.

In-Stat analysts predict 132 million of the devices will be in use by 2010.

More than 20 wi-fi-enabled models are either already on the market or will be released soon. Some of these new phones will be products of collaboration between cellular carriers and companies that offer voice over IP services.

Motorola, for example, announced a partnership with eBay's VoIP provider Skype early last year. If all goes as expected, customers with wi-fi-enabled mobile phones will have the option of using Skype's service in place of a landline service as long as they are within range of a wi-fi signal. Once out of wi-fi range, they could then operate the same phone on cellular technology, analysts said.

In-Stat analyst Gemma Tedesco explained: "Customers that have bad cellular coverage inside their houses would be able to get around [it by switching to a combination handset]."

The new phones are likely to become popular with consumers first, rather than businesses, Tedesco added.

She said: "We don't see the business growing as fast," citing the fact that wireless networks themselves have been much more readily adopted in homes than in businesses.

Caroline McCarthy writes for CNET News.com