AOL to Unveil Online Devices
That Shake the Need for PCs
By THOMAS E. WEBER and KEVIN J. DELANEY
Staff Reporters of THE WALL STREET JOURNAL
America Online Inc. plans to unveil its first wave of Internet-friendly devices that don't require personal computers.
The country's largest online service is expected to introduce a variety of gadgets, including a screen phone, in the next several weeks, according to people familiar with the company's plans.
The goal: to make AOL a pervasive presence in consumers' lives, cementing member loyalty and expanding revenue opportunities for advertising and electronic commerce. These gadgets would offer AOL members quick access to electronic mail and Web pages via a sleek, streamlined device about the size of a dictionary. Screen phones look much like a standard desk telephone, but include a screen and a small keyboard.
Company Profile: America Online
Alcatel SA, the French telecommunications concern, is seen as a likely partner in the screen-phone effort.
Unlike personal computers, which are often placed in a den or home office, the phones could be easily stationed in a consumer's living room or kitchen. And while PCs must run all kinds of software, screen phones are designed specifically to hook up to the Internet -- meaning that they can get online in seconds without a lengthy boot-up process.
So far, screen phones haven't caught on in the U.S. and have been largely seen as a technology without a practical use. However, Minitel, an early screen phone, has been hugely popular in France. With a mass market of U.S. consumers already addicted to e-mail and Web surfing, AOL is betting that some will jump at the chance to get online without a PC.
AOL doesn't expect screen phones to take the place of PCs. As with other "AOL Anywhere" devices in the works -- such as hand-held computers -- the company sees the screen phone as giving consumers a means of getting online at times when using a PC isn't convenient.
For instance, AOL members would probably continue to rely on PCs for extended chat sessions or lengthy ventures onto the Web. But they might turn first to a screen phone for a quick check of e-mail, or for brief Web tasks, such as trading a stock or ordering a book.
Alcatel confirmed that it plans to market its WebTouch screen phone in partnership with U.S. companies but declined to discuss specific partners. "There will be some announcements in coming weeks," said Patrick Liot, president of Alcatel's consumer and professional division. As for any deal with AOL, "Ask Barry Schuler," Mr. Liot said, referring to AOL's No. 3 executive and the architect of its consumer-device strategy. Mr. Schuler was unavailable for comment.
AOL's backing would give Alcatel the Internet's most powerful brand in its effort to sell screen phones in the U.S. If the devices catch on, they would underscore how the industry landscape could shift if surfing moves away from PCs. Alcatel's phone, like several other Web gadgets in the works at various manufacturers, doesn't use Microsoft Corp.'s Windows operating system. Instead, it uses Java software from Sun Microsystems Inc. -- AOL's new partner in an alliance formed around AOL's Netscape purchase.
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