Research firm Strategy Analytics claims that the sector reached the milestone during the third quarter of 2012, rising from 959 million in the previous quarter.
The market took 16 years to hit the figure, with the 1996 Nokia Communicator considered the first recognised smartphone. Around 708 million devices were in use this time last year.
"Nokia remained a dominant force in smartphones for over a decade until the arrival of Apple's iconic iPhone in 2007," Strategy Analytics senior analyst Scott Bicheno said.
"The iPhone revolutionised smartphone design and it catalysed industry growth."
Strategy Analytics' executive director Neil Mawston estimates that one in seven people currently own a smartphone, pointing out that this means there are growth opportunities in emerging markets.
"Most of the world does not yet own a smartphone and there remains huge scope for future growth, particularly in emerging markets such as China, India and Africa," he said.
"The first billion smartphones in use worldwide took 16 years to reach, but we forecast the next billion to be achieved in less than three years, by 2015."