• by Gavin O'Malley  @mp_gavin, November 8, 2005

Expanding upon their long-term relationship, Yahoo! and SBC Communications plan to release a co-branded mobile phone by mid-2006, an SBC spokesman said Monday. Yahoo! and SBC are presently working to integrate data stored on consumers' Yahoo! accounts with the phone's expected picture-taking, music playing, and e-mailing capabilities.

For example, if consumers change contact information stored on their Yahoo! contact list, the information stored on the mobile device should adjust accordingly. Likewise, pictures taken with the phone's 1.3 megapixel camera will be immediately accessible via users' Yahoo! online photo services. Plus, users can expect integration between the phone's MP3 and Yahoo! Music, SBC's spokesman said.

The SBC spokesman also speculated that Yahoo! could help make SBC's Internet-based television ambitions a reality, allowing users to program their systems using Yahoo! Web infrastructure. (Yahoo! announced a similar deal with TiVo on Monday, which now gives TiVo subscribers the ability to program their must-see-TV over the Web.)

A Yahoo! spokesman said the company has yet to make any formal announcement regarding the co-branded phone, and would not comment until that time.

The deal reflects SBC's attempt to strengthen its relationship with the content- and traffic-rich Yahoo!, according to Steve Hilton, an analyst at the Yankee Group. "SBC wants to be able to offer as much content over mobile devices as possible," Hilton said. He added that this deal was probably just the beginning. "I think you're going to see a lot more integration of devices and services," he said.

The phone, which will be manufactured by Nokia, will cost $200 to $300 at first, and will operate on the Cingular Wireless network, which is co-owned by SBC and BellSouth.

SBC--the second-largest U.S. local telephone carrier--and Yahoo! first announced their strategic alliance in November 2001, and launched co-branded DSL and dial-up services less than a year later. In November 2004, the companies extended their existing relationship. Per their arrangement, Yahoo! receives a cut of revenue for every new broadband subscriber, while SBC gets a piece of online advertising, search, and premium services dollars through Yahoo!

Yahoo!'s other broadband partners include Verizon, and more recently BellSouth, with whom Yahoo! offers co-branded high-speed services directly to more than 75 percent of U.S. high-speed households, according to Jim Schinella, vice president of business development at Yahoo! (A deal with Qwest Communications International Inc.--smaller than Yahoo!'s three existing partners--would give Yahoo! access to virtually every broadband-connected home in the United States.)

BellSouth has joint control and 40 percent ownership of Cingular Wireless--the nation's largest wireless provider, with 51.6 million customers. SBC owned the majority 60 percent stake.