A half-billion cell phones will be sold worldwide this year despite the slowdown that has strangled the telephone industry, market research firm Gartner believes.

The prediction is part of Gartner's survey of wireless handset sales in the first quarter of 2001.

The cell phone market has been hammered because of softening phone sales. Carriers, especially in Europe, are banking heavily on new phone sales to earn back the billions of dollars spent building higher-speed telephone networks. The once roaring U.S. economy has slowed just when most handset makers have trained their sites on the U.S. market, which remains relatively untapped compared with Europe and Asia.

It will be tough, but that half-billion level will be reached, said Bryan Prohm, a wireless industry analyst at Gartner. Prohm believes industry analysts have been too negative about the sector.

"The unbridled optimism of the past has been superseded by an atmosphere of increasingly reckless pessimism," Prohm said.

Prohm acknowledged that the sector has been hit by a sales slowdown. He drew a comparison to biology to explain it.

Cell phone sales had grown between 45 percent and 60 percent a year for the last few years, a rate that is "obviously unsustainable," he said. It is similar to the growth spurt of a growing young man or woman. The older the person gets, the less they grow, he said.

Handset makers themselves have continually lowered their own estimates of cell phones sales. At the beginning of the year, there were expectations that more than 600 million would be sold.

But a slowdown began lowering those predictions. Ericsson once expected global cell phone sales in 2001 to be between 450 million and 525 million. But in April it said sales would instead range from 430 million to 480 million.

Only industry leader Nokia continued to predict that cell phone sales would reach the 500 million level. In April, when he made the prediction, Nokia President Jorma Olilla said, "We are sticking our head out a lot on this."

Nokia, the survey found, continues to outdistance itself in terms of market share, selling 35.3 percent of the nearly 97 million cell phones sold in the first three months of the year.

"That's a de facto monopoly," Prohm said.

The current cell phone cataclysm of slower sales, profit warnings and job cutbacks is only a bad dream on the way to 2006, when one in every four people on the planet will own a cell phone, a new study suggests.

Market analyst Strategy Analytics believes the numbers could be even higher. SA Vice President David Kerr said his market forecast is "conservative."

The supposed 1.7 billion wireless subscribers by 2006 puts the analysts on quite a limb. It could either make the Boston, Mass.-based company a bigger seer than Joseph, who predicted seven years of drought followed by seven years of famine in ancient Egypt. Or, it could rank it up with other outlandish claims, like that of one analyst who claimed Qualcomm would trade at $1,000, or Nokia claiming it was going to sell a billion cell phones a year.

No other analysts have predictions on cell phone sales through 2006. But analysts from firms such as Gartner Dataquest said they aren't expecting the annual cell phone sales growth rate of 17 percent that would be needed to reach the 1.7 billion plateau.

Gartner's Bryan Prohm expects there will be 1 billion cell phones by 2003, with about 1.3 billion by 2005.

"They may be overshooting by a good bit," he said.

For handset makers, the future doesn't look too bright. Motorola has slashed thousands of jobs and is struggling to regain its footing. Ericsson warned that its first-quarter revenue would be lower than the forecast increase of 15 percent. Nokia, too, is expected to report less-than-stellar numbers.

Those same industry players aren't holding out much hope for 2001. A few months ago, handset makers expected nearly 600 million cell phones to fly off store shelves in 2001. Then Motorola said it expected global sales of fewer than 500 million. Siemens, the No. 4 handset maker, later pegged the global 2001 sales number at below 450 million.

The SA forecast depends on a shift in consumer buying patterns. By 2006, the disposable cell phone and the prepaid phone will have to dominate the market. The $150 handset generating a bill of $40 a month will be the relic.

"We'll have to step beyond the Nokia/Motorola mentality and go toward the 7-Eleven mentality," Kerr said.

Kerr isn't looking at some far-off shadow and calling it 1.7 billion cell phones. Cheap cell phones are already here. In Western Europe, prepaid phones sell for $50 and under, he said. In the Americas, that day may also be coming. AT&T has introduced a combination cell phone and $25 worth of airtime that sells for about $100.