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Summary:

Notebook makers are still adding embedded 3G and 4G radios in laptops, but in a world of MiFi devices and Wi-Fi gadgets, does the embedded mobile broadband model still make sense? MiFi sales are up and consumers simply don’t want a data plan for every device.

nvtl_mifi

In January 2009, I got my first glimpse of a new device from Novatel Wireless called a MiFi. The MiFi, with its credit-card sized footprint, uses a wireless 3G signal to access the Internet and then transmits a Wi-Fi signal that can be shared with multiple devices. Yet we still see new notebooks arriving with an embedded mobile broadband radio. Just today, for example, Toshiba introduced four new laptops, some of which have integrated WiMAX radios. I’m sure some customers want 3G or 4G radios in their notebooks for connectivity nearly everywhere, but nearly two years after the birth of the mobile hotspot, is it time for the embedded model to die off?

From a hardware-maker’s standpoint, adding internal mobile broadband radios can be a product differentiator. If Dell opts not to include such connectivity, and Toshiba does, the latter has a value-add feature to advertise. Based on that, I don’t expect notebook or netbook makers, for example, to simply stop adding 3G or 4G radios to their devices. But from a consumer’s standpoint, such options are likely to find less favor over time because people simply don’t want to pay for multiple connections.

Long gone are the days of consumers and enterprise employees using just one device while mobile. We’re carrying a range of devices that want to be connected to the web: notebooks, iPads, smartphones, even cameras and portable media players. A single device such as a MiFi, or a smartphone that offers Wi-Fi / USB tethering, can act as the Internet on-ramp for any and all of our gadgets. And those MiFi devices aren’t limited to 3G any longer: Clearwire offers a 4G unit while Sprint’s Overdrive is a dual-mode mobile hot spot that works on both 3G and 4G networks.

Of course, our connected world has another player besides the hardware makers and the consumer: The wireless providers provide the third point to this connected triangle, and therein lies the rub. Every device with an embedded cellular radio is a revenue opportunity for the carriers. Want to connect that notebook to the web? No problem, that will be $60 a month for the next two years. Oh, you have an iPad that you’d like to use at the local park? Carriers have you covered for $25 each month. Before mobile hotspot devices, consumers had no real choice in the matter: Connecting a device to the web while on the go either meant paying for multiple data plans or finding ways to share the connection through software means. I spent most of 2006 using my smartphone as an unsanctioned 3G modem, for example. Today I use the wireless hotspot feature in my Android handset, which turns my phone into a portable hotspot as a backup Internet connection, all for no extra charge.

Earlier this year, I noted that MiFi sales were down in 2009, likely because consumers didn’t know what the devices were or what they could do. I’m still asked by curious passer-bys about the MiFi I use on my travels. Nearly every time I explain what the device is, what it costs and how it can be used with multiple gadgets, the light bulb goes off. “Why wouldn’t I buy one?” is the most common response I hear. Even with data plans that are capped at 5 GB, it comes down to this: Do you want to use that 5GB with one device or spread it out over all of your gadgets that have Wi-Fi functionality?

Knowledgable consumers are starting to see the light: in the second quarter of this year, Novatel Wireless reported MiFi sales of $25 million, an 85 percent increase from the same quarter in 2009. Sure, there are still valid cases for integrated wireless radios in computers and other gadgets, but it’s a mobile hotspot world; embedded devices just live in it.

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  1. In my opinion, the reason why MiFi sales are down: I cannot justify to spend $60/month for 2 years for the MiFi, when you can get the same for free with an Android phone. The MiFi was great 18 months ago, but it will go away. The economics are just not there to sustain it.

    1. Veit, you have a totally valid argument, although not all Android phones offer the wireless hotspot feature. Yes, it’s a feature native to Froyo – I’ve been using it on my Nexus One since May. However, carriers can (and are) either disabling it or charging and additional fee to use it. Until carriers lose that type of control — which isn’t likely — we can’t say that an Android phone replaces a MiFi. For some, like me, it can. But for many, it either can’t or adds another monthly fee.

  2. I know the reason I never went for MiFi, even though it is a great utility, is the battery life. It’s something else to charge. A USB wireless card never needs to be charged, which is why I opted for one. When the battery life for a MiFi is better, I suspect we will see a spike in growth because they are fantastic if you don’t mind plugging it in.

    1. Donna, battery life is definitely a limiting factor. Two thoughts:

      1. I always buy a spare battery for any mobile device I own, i.e.: notebook, netbook, phone and yes, the MiFi. Between the 2 batteries, I know I can use a MiFi for 8 computing hours in a given day.
      2. The MiFi can run over USB from a computer, which charges the battery. Yup, that hurts the battery life of the host device a little, but it works in a pinch.

  3. You need to charge it, unlike USB wireless cards. That’s the only reason I opted for the card. The functionality of MiFi is amazing but it only lasts for a few hours without a charge and ruins its utility for me. Still, fantastic product.

  4. I completely agree. Another point is the premium device makers like apple charge for 3G ready devices like the iPad.

    One question I have though is the coverage and speeds you get with these personal wireless cards. Having multiple networks is a nice redundancy solution though you end up paying for it.

  5. The soap-on-a-rope (MiFi’s and Huawei equivalent) devices are not the answer.

    Integrated is better.

    The MiFi must be set up with each use. Loggin in. Passwords. Activating the connection.

    Then you’ve got the soap-on-a-rope… the device with a long cable that sits on the chair next to you. It’s awkward.

    If you have an existing laptop without 3G, then the soap-on-a-rope is useful, but otherwise, integrated is better (and will hopefully still tether your connection to other devices).

    1. You’re missing the whole point of the article. Are you going to pay for my multiple data plans then?

      Until tethering is standard and not an extra charge, MiFi devices are a far better solution for consumers.

      Virgin Mobile’s prepaid MiFi is by far the best deal out there – $150 for the device and $40/month for “unlimited” (most likely 5Gb) data.

    2. Not sure I totally understand your comment, Henry. A MiFi doensn’t need to be the “soap-on-a-rope” situation you describe. In fact, the primary use case would be as a wireless hotspot, not a wired one. And the process to use one couldn’t be simpler: you don’t have to jump through the many hoops you describe. Turn the device on and about 5 seconds, you’ve got a wireless hotspot working. You don’t have to save passwords or log in with each use – just have the computer remember the credentials as you would for any other regularly used hotspot. It couldn’t be easier or faster, to be honest.

  6. If you use an HTC Android cell phone like the desire, one thumb click and it’s a MiFi point, i.e. WiFi for laptop to connect to and 3G/3.5G backhaul.

    1. Agreed, Lee, but see my related comment to Veit above.

  7. If only Novatel would address the problems the MiFi has with it’s lithium-ion batteries, which have a tendency to ‘puff up’ and get REALLY warm…

  8. I looked at it from time to time but somehow always decided against it: a 5GB data limitation got me feel shackled.
    A jail broken iphone with unlimited data plan serves my purpose on-the-go alright, at least for now.

  9. if the carriers are really moving to metered data plans than why not give out as many SIM cards(or allow as many CDMA devices) as the customers needs top have all their device connected on one account? if data is metered the carriers should not care how many devices are connected, this would make the most sense if they move to a metered model.

    if we we get unlimited(or a large cap) data on our cell phone than tethering will be king in the future. why carry another device when you can just tether to the phone you already have?

  10. To answer the battery life question, there is a product that adds 300% more battery life to any MiFi. Get 3 hours, now get 9, get 4 hours, now get 12 hours.

    More info at:

    http://3gstore.com/mifiextended

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