America Online put itself into the wireless handset game Thursday when it announced a licensing agreement to use Nokia's WAP microbrowser.
The Dulles, Va.-based online giant, a subsidiary of AOL Time Warner, said it intends to work with the Finnish mobile- communications maven to develop and market a Netscape-branded version of a Nokia microbrowser based on WAP (Wireless Access Protocol).
Microbrowsers are analogous to browsers on PCs, but are meant for Internet-enabled wireless phones. The agreement is AOL's first foray into the microbrowser market under its Netscape brand, which it gained through the purchase of Netscape Communications in 1998.
Financial terms of the multi-year agreement with Nokia were not disclosed.
AOL is effectively hitching itself to Nokia's large audience in the handset market. Nokia holds the leadership position in wireless phones and Internet-enabled wireless phones, according to Cahners In-Stat Group, with up to 35 percent market share.
In the wireless sector, alliances with market leaders may be the most important assets companies can have. Unlike in the PC-based Net, consumers have little to no control over what browser is on their phone. The software, which comes preloaded, is virtually invisible to consumers. Relationships with the giant wireless phone carriers, such as AT&T Wireless or Sprint PCS, determine which software customers use.
According to Cahners analyst Ken Hyers, Openwave has a "lock on the browser market" for phones. "Internet-enabled wireless phones are the way of the future," Hyers said. "In fact, more subscribers will be accessing the Internet by phone than by the PC in the next couple of years. This market will be a very competitive one."