AT&T eyes more computer cell links, e-readers

By Sinead Carew

NEW YORK (Reuters) - AT&T Inc (T.N) sees scaled-down portable computers and electronic readers as the hottest new devices it plans to support with cellular Internet connections, a top company executive said on Thursday.

Along with its biggest rival Verizon Wireless, AT&T is banking on devices used mainly for data rather than voice for the next phase of wireless growth as the vast majority of the U.S. population now owns cell phones.

Glenn Lurie, whose job involves convincing gadget companies to include AT&T cellular connections, is looking to support more devices such as netbooks and mobile Internet devices, which are smaller than laptops, handier to tote around and designed for easy Web access.

"This is a hot space," said Lurie, referring to netbook computers in an interview with Reuters at the Consumer Electronics Show in Las Vegas. "I see this as a very big play in the youth market."

Lurie said netbooks would have particular appeal to students who need to lug them from class to class each day but said they could also be a huge hit with other users who simply want something neater than a laptop.

Electronics retailer RadioShack Corp (RSH.N) recently started selling an Acer Inc (2353.TW) netbook for $99 to customers who sign up for a $60-a-month, two-year data plan with AT&T wireless. Lurie said AT&T was seriously looking to selling similar devices in its own stores "when the time is right", giving its customers more options.

"Are there going to be subsidized laptops in the market? The answer is yes," said Lurie, who said RadioShack had decided on the pricing for the Acer device.

He would not comment on the specific terms of the RadioShack deal but said that when a retailer signs up a customer to a two-year AT&T service contract, it can receive a commission of about $200 to $250.

The executive, who planned meetings on the sidelines of CES with all kinds of gadget makers, said that key issues he would discuss for computers such as netbooks would be how to prolong battery life, and the ability to shorten boot-up times.

Laptops often take several minutes to switch on fully.

"The goal needs to be for all of us in the industry (to work toward) a more instant-on type device and an all-day device," he said.

Lurie, who also works closely with AT&T distribution partners, including iPhone maker Apple Inc (AAPL.O), declined to give any details about AT&T's plans for supporting e-readers but said that they would be key gadgets for the company.

This week, Verizon said it planned for its network to support new e-readers as soon as this year.

Verizon Wireless, owned by Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L), will surpass AT&T as the biggest U.S. mobile service provider on Friday when it closes its purchase of smaller rival Alltel.

Beyond computers and e-readers, Lurie said he was open to considering any kind of gadget for AT&T's network.