updated 7/20/2005 8:50:03 AM ET 2005-07-20T12:50:03

Global sales of cell phones will reach nearly 800 million this year, and the annual tally will surpass 1 billion in 2009 though market growth will soon slow sharply, the research firm Gartner Inc. says in a new forecast.

The report Wednesday also estimated 2.6 billion mobile phones will be in use by the end of 2009.

Notwithstanding the overall strength suggested by the numbers, cell phone makers are not necessarily reaping huge profits as competition pressures them to cut prices.

Motorola Corp. posted strong results on Tuesday but LG Electronics Inc. reported that its second-quarter profit plunged 70 percent as its cell phone division registered a loss. On Friday, Sony Ericsson said its earnings dropped 16 percent in the second quarter despite growing sales.

Asia remains the fastest-growing region, accounting for one of every four phones sold, a pace that will increase to one of three by 2009, Gartner said.

"In mature markets like Europe and North America, subscribers are still buying replacement phones. In emerging markets like Brazil and India, new customers are signing up for mobile services at an even faster rate," Gartner analyst Carolina Milanesi said in the report.

Sales for the year are expected to total 779 million, an increase of 15.6 percent from 2004's tally of 674 million, according to the Gartner forecast.

However, the rate of growth is expected to drop off sharply after this year, nearly halving to 8.8 percent in 2006 then trailing lower to 5.9 percent in 2009, according to the Gartner forecast.

The estimates and trends outlined by Gartner were roughly in line with forecasts by other industry researchers.

IDC, for example, estimated in April that cell phones shipped by manufacturers to wireless service providers and retailers will total 760 million in 2005, rising to 930 million in 2009.

Shipment figures can vary sharply from sales data because not all phones shipped are sold, and many phones that are shipped during one calendar year may not be sold to end users until the next year.

In addition, sales data can be harder to estimate because most service providers do not disclose such data, while most handset makers report more freely on the number of devices they produce and ship.

The Gartner study also said so-called "smart phones," with robust features inherited from personal computing, are the fastest-growing category, with sales expected to exceed 200 million devices in 2008.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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