Nokia smart phones capture Yahoo!'s imagination

Nokia has begun selling advanced mobile phones with Yahoo! messaging, search and web browsing software embedded inside, with the aim of boosting wireless data usage and sales of smart phones.

The Finnish handset maker said on Tuesday that the first three smart phones to feature Yahoo!'s popular software are Nokia models 6680, 6681 and 6630, which are now widely available in Europe and Asia. Nokia said additional models will be unveiled on Wednesday.

Smart phones are handsets that are always connected to the internet and that have PDA-like processing power for taking on much more complex tasks than a typical mobile phone.

The deal is another example of how handset makers are turning to Yahoo!, Microsoft, AOL and other internet messaging and browsing companies to boost mobile phone use and sales of next-generation handsets. The rationale is that if consumers use an interface they're already familiar with, they will be more likely to utilise a phone's internet connection, and by doing so generate new revenues for the mobile phone companies.

Nokia vice president, Harry Santamaki, said in a statement: “[Tuesday's] agreement is a progressive step in the adoption of an online lifestyle. We are providing consumers with a familiar way of accessing the internet and Yahoo! email."

US mobile phone operators believe that internet search, email, games and other features will combat the steep decline in revenue from voice calls. But for years, such services have been difficult to market in the United States.

The Nokia-Yahoo! agreement is also meant to lift smart phone sales, which remain relatively light. The high-end handsets make up less than one per cent of a global total of more than 1.2 billion mobile phones. But smart phones powered by operating systems from Microsoft and Symbian, a company partly owned by Nokia, are expected to become much more common over the next decade if handset prices drop.

Ben Charny writes for CNET News.com