March 26, 2010 / 2:52 PM / 8 years ago

UPDATE 2-Nokia buys U.S. mobile browser firm Novarra

* Buys U.S. firm Novarra, with more than 100 staff

* Does not disclose value of the deal

* To use Novarra browser in its Series 40 platform (Adds quotes, shares, more background)

By Tarmo Virki, European technology correspondent

HELSINKI, March 26 (Reuters) - Top-selling mobile phone maker Nokia NOK1V.HE will buy privately held U.S. mobile browser firm Novarra to improve Web surfing on a wide range of its mass market cellphones.

Wireless Internet usage is set to surge in 2010 and beyond as operators and phone makers continue to play catchup with Apple’s iPhone (AAPL.O).

Novarra and its larger rival Opera Software OPERA.OL offer browser technology that packages most of the data, thus weighing less on operators’ increasingly congested networks.

“Connecting the next billion consumers to the Internet will happen primarily on mobile devices,” Niklas Savander, the head of Nokia’s services business, said in a statement.

Tech-savvy consumers have long used cellphones to access Internet on the go, but Web usage moved firmly into the wireless industry’s focus after the 2007 introduction of the iPhone, and it is spreading from smartphones to more simple models.

All top handset vendors have since scrambled to match the iPhone’s browsing experience, by buying software or whole companies, or by trying to build better browsers.

“Everyone knows that Nokia has defined this segment as strategically important. At the same time everyone knows that the Nokia browser has compared badly with the best ones in the market,” said Espen Torgersen, an analyst at Carnegie.

“Most important the deal shows that the browser segment is important for handset makers, operators and content suppliers.”

Shares in Novarra’s rival Opera rose on the news and closed 1.3 percent higher at 23.90 crowns on Oslo bourse.

Nokia did not disclose the value of the deal for the company, which employs more than 100 staff, adding it aimed to close the deal in the June quarter.

Nokia will use Novarra’s technology on the world’s most widely used mobile platform Series 40, its proprietary operating system for mass market phones.

It is using its own browser in most of its smartphones, and also Mozilla’s Firefox in its top-of-the-range model N900.

Nokia said it would continue to support Novarra’s current clients, including Verizon, Vodafone in Britain, Yahoo, Turkcell, and 3 in Italy and Hong Kong.

Nokia shares closed 0.4 percent higher at 11.57 euros, helped by JP Morgan upgrading the stock to “overweight” from “neutral”. (Additional reporting by Gwladys Fouche in Oslo, editing by Will Waterman)

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