Nokia, RealNetworks team for music, video over cell phones

The deal may be a bit premature technologically; mobile phone networks today are too slow to support anything but the most rudimentary multimedia. But analysts say the relationship could be a significant win for RealNetworks as faster wireless technology reaches the market in the next few years.

"It's going to be extremely important for the next generation of service," said Ray Jodoin, an analyst with the Cahners In-Stat Group. "One of the very big aspects of (next-generation wireless networks) will be streaming audio."

Even if the networks aren't ready, however, RealNetworks' strategy may be right on time. Mobile phone companies are already looking forward to the day when phones take the place of a Sony Walkman or CD music player, adding support and storage for MP3s and other multimedia formats into their machines.

RealNetworks' chief rival, software giant Microsoft, also isn't standing still. Though it hasn't made a high-profile effort to push its Windows Media software into the wireless world, it is still making an as-yet-unsuccessful bid to make its wireless Web infrastructure a standard among mobile phone carriers.

Other streaming media companies, such as San Diego's PacketVideo, also are moving ahead with media formats they say are tailored specifically for wireless networks, hoping to become the RealNetworks of wireless.

These companies are waiting for the advent of so-called third-generation wireless technology, which will bring high-speed surfing to wireless phones. Analysts say the technology will start being installed in mobile phone networks as soon as next year in Japan and possibly some places in Europe, but it probably will take longer to establish in most areas of the United States.

RealNetworks says its aim is to give the people who use its software on the ordinary Internet more options.

"We're absolutely building our business so any broadcaster can broadcast once and reach the widest possible audience," said Peter Zaballos, RealNetworks' director of systems marketing.

Nokia, the largest mobile phone handset manufacturer, is a good first step for the company, analysts said. Because it's far more difficult to install software on a phone than it is on a computer, it's critical that companies that want ubiquitous use have their software supported by the phone makers themselves.

Nevertheless, analysts caution that listening to music or other multimedia on a wireless network won't necessarily have the same all-for-free model as on the ordinary Web.

Already, AT&T Wireless is working under a business model in which a few wireless Web sites are free to access, but going outside that group requires surfers to pay an extra fee. Because wireless bandwidth is relatively scarce, and because multimedia applications can tax even fast connections, most analysts say the carriers will likely charge extra for features such as music or video streams or downloads.

"Nobody has really been able to determine what these services will cost," Jodoin said. In most places in the world, governments haven't even finished auctioning off the costly licenses to use the airwaves for next-generation wireless services, he noted.

Nokia has been busy with deals setting the groundwork for next-generation services, however. Earlier this week, it struck a deal with AT&T developing new phones supporting features such as audio streaming and videoconferencing.