August 15, 2001 8:30 AM PDT

AOL cuts Communicator price, hikes rate

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AOL Time Warner's America Online unit Wednesday slashed the price of its two-way messaging device but boosted the service's monthly subscription rate.

The unit now costs $99.95, about one-third the $329 price tag with which it debuted last year. Its monthly subscription fee rose to $29.95 for unlimited use, up about 50 percent from the initial cost of $19.95.

The price changes came with an overall upgrade of AOL Mobile Communicator, which is built on the popular Research In Motion device using AOL software and running on Cingular's wireless network. The company said the changes have sped up its e-mail function and altered its interface with new features.

The device, which lets customers compose and send both e-mail and instant messages, is one element in the company's AOL Anywhere strategy, which attempts to disperse the popular online service into non-PC areas such as wireless devices, cell phones and handheld computers.

AOL has taken bold steps in getting its services onto non-PC devices, and in so doing has made it possible for its 30 million members to access their e-mail accounts or send instant messages on Internet-enabled devices away from their primary computers.

But the company is not alone in its ambitions. Microsoft and Yahoo have also aggressively pursued deals with cell phone, pager and PDA (personal digital assistant) makers to allow people to access their e-mail and content services.

The AOL price reduction and its accompanying subscription increase came as the next phase in marketing the product to more mainstream consumers, according to company spokeswoman Anne Bentley.

"We introduced the product for the early adopter market last November and, as is tradition with wireless and other consumer electronics devices, we tested pricing and features based on that early feedback and lowered the price," Bentley said.

Bentley did not elaborate on why the company decided to increase its subscription fee, but explained it was the result of "member testing."

New features in AOL Mobile Communicator let people compose new e-mail without waiting for other messages to be sent. In addition, people can choose from a list of "away messages" for the instant messenger and can delete conversations with one click. The device also has improved indicators of signal strength and network congestion.

 

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