AOL/Alcatel deal looks likely

AOL would not comment on whether it talking to Alcatel but a US spokeswoman for the online giant confirmed the company's intention to push the service onto all available platforms as part of its "AOL Anywhere" strategy.

Andy Greenman, a consultant for US industry analyst Yankee group believes an Alcatel/AOL deal is likely. "Alcatel has got a nice phone and its ready to go. AOL will definitely partner with someone like that as a logical extension to its Netscape/Sun deal," he says.

If AOL does decide to offer its service on consumer gadgets, its relationship with Sun will be key says Greenman.

AOL is racing to provide Internet access on devices other than PCs and is now in a strong position according to Greenman, who, despite recent reports remains sceptical about Yahoo's intent to follow suit. "Yahoo! doesn't have the power AOL has," says Greenman. "I really can't see it making such a deal with hardware. It is more interested in joining up with software companies rather than going the whole hog. Realistically who is there for them to join with?"

IDC analyst Mikael Arnbjerg agrees the Sun/AOL deal will allow the ISP to dabble in the gadgets market. "The devices AOL would be looking at are fixed phones for home access to the Internet," says Arnbjerg. "Basically a screen with a phone attached."

Alcatel's WebTouch screen phone is aimed at the mass market according to a spokeswoman -- a market AOL has confirmed it is targeting. The phone offers Internet access at 33.6K/sec and will, according to Alcatel, be "easy to use and affordable." It will be on the shelves from September with mobile versions available at the end of the year.

No prices are yet available.