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Commentary: AOL pager success hangs on cost, customer base

AOL Mobile Communicator is yet another mobile device in an already crowded market. However, America Online's huge subscriber base will give it a potential market.

    By Abha Garg, Gartner Analyst

    AOL Mobile Communicator is yet another mobile device in an already crowded market. However, America Online's huge subscriber base will give it a potential market.

    This consumer-oriented initiative represents another revenue stream for AOL, which has wisely timed its offer near the holiday season to target holiday shoppers.

    See news story:
    AOL two-way pager calls up email, IMs

    One factor that could potentially limit sales, though, is cost--the upfront cost of the device itself is $329.95 and then the recurring service subscription fee of $19.95 per month. Since AOL has aimed this device and service at its own members, customers will be asked to pay the mobile device subscription on top of the AOL Internet access subscription. Therefore, costs can start adding up.

    This initiative fits in with the AOL Anywhere strategy and the online giant's plan to dominate the wireless access market. Other dominant portals and access providers are trying to do the same. For example, Yahoo signed a bundling agreement with Palm Computing in March.

    A version of Microsoft's Internet Explorer will come with its smart phones and handheld devices, such as the PocketPC and the Windows CE devices, which compete with Palm- or Symbian-based devices. Whatever its other advantages, however, Microsoft does not have nearly as large a subscriber base to sell into as AOL has.

    (For related commentary on another wireless device, the BlackBerry 950, see TechRepublic.com--free registration required.)

    Entire contents, Copyright ? 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.