While global sales of mobile broadband devices are up 55 percent in 2009, there’s was a surprising drop in sales of personal hot spots — a reported decrease of 28 percent from 2008. Two key reasons are the likely driving force behind the lower sales numbers.

Global sales of mobile broadband devices rose 55 percent in 2009 over the previous year, according to a recent Infonetics Research report, even despite the effects of the economic downturn. Even more surprising, however, was that sales of personal hotspots such as Novatel’s MiFi fell 28 percent.

As 3G technologies transition to faster speeds and fourth-generation wireless networks are launched, it makes sense that overall sales of mobile broadband devices would — but convenient personal hotspot sales should be on the rise, too. In fact I would have expected them to have been increasing at a faster rate than other 3G solutions like embedded modules inside laptops or USB dongles. These pocket-sized personal hotspots connect to the web just like their USB counterparts, but easily share that pipe with several other devices over a Wi-Fi connection — usually for the same monthly fee. With the ubiquity of Wi-Fi radios in computers, phones and even consumer electronics (think handheld games and digital cameras), a personal hotspot makes far more financial sense. And that shared connection adds value to existing devices that can leverage it.

User confusion about personal hotspots may be one reason for decreasing sales. Whenever I take the MiFi out at coffee shops or around other people, I’m invariably asked what it is and what it does. Although these small routers debuted just prior to the January 2009 Consumer Electronics Show, people simply don’t know about them — a point driven home by Novatel in an earnings call.

Is this lack of knowledge encouraged by carriers? With the same monthly fee as a single-use 3G solution, I have to wonder how actively carriers promoting the MiFi devices. Why sell one mobile broadband enabler that shares the connection when you can sell multiple solutions and multiply revenues?

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  1. Chris Meadows Wednesday, April 7, 2010

    Huh? If they were introduced in 2009, how could their sales fall from the previous year? There wouldn’t have been any SOLD the previous year.

    1. Chris, the Novatel product was introduced in December of 2008, but other wireless portable routers existed prior to that. I’m thinking of those by Cradlepoint, for example, which take a 3G USB dongle and create a Wi-Fi hotspot for it.

  2. Kevin,

    Great perspective…yes I think further education is needed for folks to just know what personal mobile hotspots are all about. MiFi’s are great..and also Cradlepoint devices do the same thing.

    Whenever I have my personal hotspot going, people always intrigued by it, so I know interest exists…it’s just a matter of framing it in an approachable way for mainstream customers.


  3. My personal preference is for fewer devices. I believe that the iPad has the correct approach — a monthly fee without contract. Perhaps Apple will add such services to devices like the Air. That would be nice!

    But, I am in the market for either a MyFi like product or an iPad that I could transfer files to and email from anywhere. Both go with me, but one simply requires more thought and an approach to being online in a working mode. Such mobile products are great for technology aficionados. But, I disagree with the assessment and slot MiFi-like products with mobile internet cards, another area that never took off per se.

    A year ago, I would have bought it…

    1. On the other hand, I think I would rather like a MiFi-like product. To be able to hook up my iPod Touch, iPad, laptop, and whatever other wifi-able devices I might have on my person at once, wherever I am? That would be pretty awesome.

      What I’d really like would be Clearwire mobile broadband, which would let me do the same thing without monthly data caps. But they’re not in my area yet. :(

      1. I do not disagree, simply am stating that I am tired of so many devices. My interest is in the services rather than the device per see.

        I have not had a land line since 2000 and in that time survived on data cards of various forms. I MiFi like product should be exactly what I want. I should be the target market. And yet, I am not.

        So, my assessment matches the numbers in the article rather than the opinion. Why do I want an iPad with data rather than a MiFi? Or, better yet a Mac tablet with embedded cellular. Personally, I would rather have the device connected.

  4. @Kevin,

    I know unequivocally that the carriers are promoting personal hotspots. We feature personal hotspots prominently in partnership as an authorized distributor with personal hotspots that are free and subsidized on BroadbandLaptops.com:


    The key problem with hotspot sales are the data caps on the plans. The top 4 carriers offer plans with 250MB caps for $30 per month. Using a personal hotspot with multiple users will blow past this limits quite easily. This fact is putting downward pressure on the sales of personal hotspots.

    My $.02,


    1. Curtis, no argument that the plan caps are an issue, but I don’t think the 250 MB plan at $30 a month is indicative of that. All four carriers in the U.S. also offer a 5 GB plan for $60 a month, which is far more reasonable from a per MB viewpoint. And Sprint includes unlimited 4G with their $60 plan for 3G.

      I’m also not sold that these plans are intended for multiple users as you say. One user with multiple devices is primarily the intent, although a customer could obviously share the connection with other users.

      Definitely the caps can hurt sales, but I don’t think it’s the 250 MB cap that’s doing it.

      1. @Kevin,

        You’re points are taken, but I think you are still missing my key point. Most consumers who’d buy a personal hotspot likely have wired broadband at home, as well as a cellular plan for their phone. Hence, a mobile broadband plan is incremental, which means the $30 dollar per month plan is significantly more valuable than the $60 per month plan. This is further magnified by the vast network of free WiFi that we have here in the United States.

        Bottom line, you questioned the carrier commitment to personal hotspots and it seems clear to me that this assertion is incorrect. Personal hotspots, and mobile broadband plans in general provide incremental user value, as such the data plans need to be priced incrementally from the low end of pricing and usage. This starts with prepaid data plans, followed by lower priced data contracts with reasonable usage limits. It is great that you pay $60 on a month to month basis, but recognize that you’ve got a “ferrari” of a data plan, and most people simply want a “chevy” of a data plan that’s effective.

        I hope I made my key point clearer.

        All the best.

      2. I agree with Curtis. You don’t make consumers think, or they go away. Monitor usage? Gone.

        If they want wide-spread adoption, an iPad like pricing level is necessary. Do you not think that Steve had that conversation with AT&T? Those service providers that do not have such conversations will be unsuccessful.

      3. Curtis, thanks for the second reply as it better illustrates your point. I agree that a personal hotspot is an incremental purchase, but I guess I look at it slightly differently. Why? Because it’s not incremental for one single device like a USB dongle, for example. But I totally get your point.

        It would be interesting to see what the sales ratio is for the two plans — the 250 MB plan vs the 5 GB plan for 2x the price. I’d love to get my hands on those numbers, but I’m sure that will never happen. ;)

  5. consumers look at these and than compare it to tethering with an existing smartphone. looked at that way these seem like a terrible deal. pay $60+ a month for a separate device or enable wifi tethering on the phone you already own for free or the cost of the enabling app.

    for these mifi devices to take off they would need to be totally unlimited(not capped @ 5GB) and marketed as DSL/Cable replacements.

    1. Kevin C. Tofel tom Wednesday, April 7, 2010

      Great point, Tom, but not every smartphone or carrier supports tethering (sadly!), so it’s not an option for everyone. Additionally, on CDMA devices, tethering ties up the phone — if a call comes in, the data stream will stop, so not an ideal situation.

      I agree with you on the caps though — if those were removed or lifted, it could help sales.

      1. My decision to not buy the MiFi, even though I was interested, rested on a few key factors:

        1. Tethering via bluetooth is standard on my TP2
        2. $20 is cheaper than $60 for the same data
        3. Phone data plan has no cap – truly unlimited use
        4. 4500mAh battery allows all-day wireless tethering
        5. No need to carry/charge a third device

        Now, instead of 3G built-in, or even wifi, all I look for in any netbook/notebook I use is bluetooth (common enough) and connect wirelessly. Problem solved. And I don’t need to hunt for a hotspot either.

        Where the Mifi really shines is when it comes to sharing that connection – and that’s exactly where the restrictive 5GB cap kills it. T-Mobile in Europe offers broadband plans at 7GB and 14GB and does not charge if you go over, but merely throttles your speed. It’s also far cheaper, costing about $35 for the 14GB plan.

        I know I’ve said this before, but I really think the suits here in the US need to take their horse blinkers off. Unlimited 3G may be impossible to provide for every device, but offering a 14GB plan for the MiFi has to be doable. Either that, or expand 4G into major markets faster.

  6. if these were offered on prepay plans i believe they would be extremely popular. there are simply not a lot of option to get broadband(wired or wireless) without a contract.

  7. Kevin, good post.
    There are few important reasons on why these little hotspots are failing to sell. First these Mifi’s are expensive compared to a phone hack. Second, the commitment of another two year contract with the carrier. Third is the data usage restriction of 5 Gb / month.
    Verizon started giving the hotspot free on the Palm pre via an app making these obsolete for majority of the consumers. However the from the business community perspective ,these are invaluable gadgets for folks who are on the go.

    The carriers can improve the sales of these if they can give them for free and shrink the contract to two to three months.

    1. Kevin C. Tofel gbp Wednesday, April 7, 2010

      All valid points.

      Two thoughts on the contract commitment. 1: I’m on a month to month plan with my MiFi because I had already used a 3G USB dongle for 2 years prior. Once the contract was up and I was on month-to-month service, I bought a used MiFi and swapped it on my account. Yes, I still pay the $60 a month, but I have no contract commitment, nor ETF if say 4G hits my area. 2. Consumers could (but likely won’t) pay full price for a MiFi device and be contract free like I am. Not a great option, but worth a mention.

      1. Kevin,

        I did a similar thing. After my broadband stick contract expired I bought a Verizon MiFi from Amazon sans contract. To stop paying twice for mobile broadband I switched my AT&T SIM from my iPhone to my old Nokia N-Gage QD. Turning my iPhone into an iPod Touch allowed me to remove the $30/month iPhone data plan from my account. Paying Verizon $60/month permits me to use my MiFi with any WiFi-enabled device, not just laptops.

      2. Kevin, Can you break the month to month plan, wait for couple of months and activate it back to a month to month plan ?

  8. Mobile hotspots are awesome. I have been using the sprint MiFi from day one. It is great for my traveling but that is about it. When I moved about 6 months ago I used the sprint mifi for a bout a week while I was waiting for the cable company to connect me. After about 3 days of just me and my wife using it we were over the limit. 3G can never replace a wired connection because of the 5GB bandwidth limit. Now with sprints 4g there is no limit and I believe that when wimax becomes more wide spread we may see this trend turn around.

  9. I dig my Verizon Mifi because I never have to plug anything into my computer. I just reach into my bag and turn it on and I’m connected.

    Another cool/uncool thing is that it helps deal with ATT’s poor service in San Fran. Sometimes I’ll connect via Mifi and get a flood of emails that have been waiting on a server… and now with Toktumi’s Line2, I can make calls that sound better than ATTs.

  10. I dig my Verizon Mifi because I never have to plug anything into my computer. I just reach into my bag and turn it on and I’m connected.

    Another cool/uncool thing is that it helps deal with ATT’s poor service in San Fran. Sometimes I’ll connect via Mifi and get a flood of emails that have been waiting on a server… and now with Toktumi’s Line2, I can make calls that sound better than ATT’s.

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