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Cell phone to double as Net phone

New smart phones with Skype VoIP software due in the Unites States, Europe and Asia in March.

Cell phones that double as Internet phones will become available in the United States, Europe and Asia by March, the manufacturer said Thursday.

Distributed by Dubai-based developer i-Mate, the $850 PDA2K and PDA2 cell phones come equipped with voice over Internet Protocol (VoIP), a software that shifts phone services from the highly regulated and taxed traditional local phone networks onto the unregulated Internet. The VoIP software comes from Skype, a popular Europe-based Net phone provider.

The i-Mate phones are based on a Microsoft operating system and contain radios capable of using both cell and Wi-Fi networks--the latter inexpensively distribute Internet access over short distances and are commonly found in cafes, transportation hubs, hotels and retail outlets. When you're in a Wi-Fi "hot spot," the Internet phone software lets you dial other Skype users for free, or pay 2 cents a minute for calling traditional phones.

Analysts have long suggested that the Net/cell phone tandem could prove a potent weapon that Net phone, cell and broadband providers could use to steal customers from the nation's major local phone companies.

But a new study projects it will be a number of years before Wi-Fi phones manage to fulfill expectations. Analysts at Infonetics Research say that while Wi-Fi phones are taking hold in hospitals and businesses, worldwide sales were negligible last year. According to estimates, revenues from the sale of such devices will grow to $4 billion by 2009, a relative pittance when compared with overall cell phone sales.