Taiwan's mobile phone sales were forecast to drop 9.3 per cent in 2009 because of weakened replacement demand and an extended replacement cycle, an industry report said Wednesday.

Sales were estimated at 6.39 million units by Taiwan's Market Intelligence and Consulting Institute, which called 2009 a crucial year for Taiwan mobile phone operators in terms of strengthening their share in the mobile internet market.

"Overall, as the global economy is projected to be locked in a downturn in 2009, consumer confidence is expected to be even weaker in the year ahead," the report said. "As a result, it is expected that there will be keen price wars in mobile phone sales channels and that mobile operators will lower the internet access rates for their data cards to stimulate demand."

Phone sales dropped in the last three quarters of 2008 as did their average selling prices as mobile phone users mostly chose to obtain free phones when renewing their subscriptions.

However, mobile operators' subsidy policies for 3G phones and smart phones boosted sales of 3G phones, which accounted for 49.7 per cent of the overall market volume, while sales of smart phones inched up to more than 5 per cent of the overall market volume, the institute said.