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AOL at arm's length everywhere

The online giant's plans to offer services to small gadgets that connect to the Internet will help it reach more customers and will advance its reach in Europe, analysts say.

America Online's plans to offer services to small gadgets that connect to the Internet, eliminating the need for personal computers, will help the online giant reach more computer-phobic customers and will advance its reach in Europe, according to analysts.

The non-PC gadgets, including a phone with a screen, will help AOL tap into a group of technophobes who have kept the PC and Internet revolution at arm's length, analysts agree. Industry experts also note that with these devices, AOL may be able to tap into a European audience that has shunned the behemoth online service but fallen for screen-phone devices. These gadgets have been slow in catching on in the United States.

"The products that are really going to help AOL drive down into this mass-market audience in many ways could be consumer devices," said Jim Preissler, an Internet analyst at PaineWebber. "AOL wants to make sure that they have a hook into that market, so when their customers do begin to migrate to other devices, they will remain AOL customers."

AOL users generally are seen as less sophisticated in their Web knowledge and habits, mainly using the service for email and chat. The non-PC devices to be released sometime in the next several weeks, according to a report in The Wall Street Journal, are designed to handle just this kind of use.

"The actual number of people getting on the Net is increasing, but you really are going to have to appeal to a mainstream population, which includes a sizable number of computer-phobic people, like my mom," said Phil Leigh, an analyst at Raymond James. "These people are likely to respond to something that looks like a telephone instead of a computer."

Some also note that AOL's reported move comes at a time when major Internet players have become aware that these browser-enabled handheld devices and set-top boxes are on the verge of taking off in the next few years.

"Everyone is realizing that they need a strategy for these alternative devices," said Zia Daniell Wigder, an analyst at research firm Jupiter Communications. "You are going to see a number of Web players rolling out new strategies for these devices, because otherwise they fear that they will be left behind."

Earlier this month, for example, Yahoo struck a deal with a firm called Online Anywhere in an effort to extend its reach to handhelds and other devices such as WebTV. Yahoo calls its efforts "Yahoo Everywhere."

Leigh added: "I think it reflects an underlying trend toward network ubiquity. Connect anywhere, anytime. That is where we are heading, and the screen phone is just one manifestation of that."

Though PC and Internet penetration in Europe, along with awareness of the AOL brand, has lagged behind the United States, the use of screen phones has exploded.

"This would be a good way for [AOL] to get into the non-PC market in Europe, especially in France, where the Minitel has been very popular," said Wigder, referring to an early screen phone.

Most analysts expect the gadgets to cost somewhere in the region of $300. AOL declined comment on its device strategy, saying only that the company wants to be available on "any emerging platform whether on a TV, handheld device, or in a car."

"Our goal is to make AOL available on whatever is the most convenient method people are using," said an AOL spokeswoman.