The letter Ä occurs as an independent letter in the Swedish, German, Luxembourgish, North Frisian, Finnish, Estonian, Skolt Sami, Karelian, Saterlandic, Emilian, Rotuman, Slovak, Tatar, Kazakh, Gagauz, and Turkmen alphabets, where it represents a vowel sound.
The letter Ä arose in German and later in Swedish from originally writing the E in AE on top of the A, which with time became simplified as two dots, consistent with the Sütterlin script.
In Emilian ä is used to represent [æ], occurring in some dialects, e.g. Bolognese bän [bæŋ] "good, well" and żänt [zæŋt] "people".
In other languages that do not have the letter as part of the regular alphabet or in limited character sets such as US-ASCII, Ä is frequently replaced with the two-letter combination "Ae".
In modern typography there was insufficient space on typewriters and later computer keyboards to allow for both A-diaeresis (also representing Ä) and A-umlaut.
Since they looked near-identical the two glyphs were combined, which was also done in computer character encodings such as ISO 8859-1.
[1] Ä is also used to substitute Ə (the letter schwa) in situations where that glyph is unavailable, as used in the Tatar and Azeri languages.