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Study: Wi-Fi cell phones will hit it big

Want to get Skype or Vonage on your cell phone? According to new research, you won't have to wait much longer.

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

Wi-Fi, which offers wireless Ethernet connections over a few hundred feet, 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 cell phones.

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

In-Stat analysts predict that 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 Internet Protocol (VoIP) services, which allow transmission of voice and data over the Internet.

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 cell phones would 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.

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

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

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