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RealNetworks Gets Vodafone Contract

The wireless carrier, in a nonexclusive deal, will use Real's software to deliver music and video.

June 30, 2003|Jon Healey | Times Staff Writer

RealNetworks Inc. has scored its biggest victory to date in the mobile-phone market, convincing the world's largest wireless carrier to use Real's software to deliver video and music to its customers.

On Sunday, Seattle-based Real announced a nonexclusive agreement to supply technology to Vodafone Group for a multimedia service that runs on its most advanced networks. A top Vodafone executive said the company planned to deploy Real's software in a number of the 36 countries it serves, through either subsidiaries or joint ventures.

In the United States, Vodafone owns about 45% of Verizon Wireless, the largest U.S. mobile-phone company. So far, though, Vodafone is using Real's technology only in a few countries overseas, including Germany and Italy, Real spokesman Dan Sheeran said.

Financial terms were not disclosed. Sheeran said Vodafone will pay Real a licensing fee whenever it installs or expands the capacity of the technology, and Real will collect licensing fees from phone manufacturers that include its media player technology on Vodafone phones.

Real also has nonexclusive deals with Nokia Corp., the world's largest cell phone maker, and Ericsson, the largest supplier of equipment for wireless phone networks.

Analyst Richard Doherty of the Envisioneering Group, a technology research firm in Seaford, N.Y., said the Vodafone announcement is "very bad news for Microsoft," which sells competing technology for encoding, delivering and playing music and video. Real "really did win over Vodafone, and we think they'll win over other operators in the coming months," Doherty said.

One advantage Real has over Microsoft and other competitors, Doherty said, is that Real offers a package of music, video and news for wired customers that can quickly be plugged into a mobile-phone company's network. "Real just kept banging away, taking what was originally a wired infrastructure and making it work for wireless," he said.

Another difference is that Microsoft's products are designed to deliver audio and video to cell phones in Microsoft's proprietary Windows Media format, whereas Real supports both proprietary and industry-standard formats.

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