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Summary:

FaceTime, Netflix, and Pandora were built for the Wi-Fi network. It’s hard to imagine the phone bill if all this data was streaming over the 3G networks. These services, and others like them, have blossomed, thanks in part to the increasing ubiquity of the Wi-Fi network.

ipad facetime

One of the greatest things about the new iPad 2 is FaceTime, a super-simple video chatting app and service that allows you to well talk to anyone else who has the FaceTime on the devices — iPhone, iPod touch (with camera), iPad 2 and a Mac. I’ve been using it incessantly, while sitting on my couch, chatting up a storm with the loved ones.

FaceTime is an app built for the Wi-Fi network. It’s hard to imagine the phone bill if all this data was streaming over the 3G networks. And the same goes for Netflix, Hulu, Spotify and Pandora, which are key parts of our new connected digital life. These services have blossomed, thanks in part to the increasing ubiquity of the Wi-Fi network.

Applications such as these, not to mention our desire to check out tweets, Facebook friends, watch YouTube videos and occasionally even do work, has doubled the network traffic on the wireless networks since last year. These networks use gear from companies such as San Francisco-based wireless gear maker, Meraki. That traffic is expected to double every year, according to Sanjit Biswas, CEO and co-founder of Meraki.

Multiple Device Wi-Fi World

“We used to have one device on Wi-Fi: our laptop,” says Biswas. “Then we had two devices — laptop and our phones using the Wi-Fi.” Soon, we will have multiple devices that are piggybacking off the Wi-Fi based network connections.

Biswas predicts that by 2012, we will have between four and five devices around us with Wi-Fi built into them. (I actually have more than that even now: a phone, a tablet, a computer; an Internet-connected set-top box (Apple TV) and a digital camera with Eye-Fi.) Tomorrow, it wouldn’t be preposterous to imagine your microwave communing with a server over a wireless connection.

It’s quite a remarkable change. I remember buying Lucent-made Orinoco PCMCIA cards for an early variant of Wi-Fi and networking hubs with limited coverage. I used to wonder when it would really be possible for me to sit on my couch and get a decent Internet connection. That of course was in the last century; today, Wi-Fi is ubiquitous, and we want continuous coverage of at least 10 Mbps from our Wi-Fi routers. Tomorrow, we’ll want 50 Mbps and soon 100 Mbps wireless connections.

iPhone Lifts All Boats

The demand for Wi-Fi networks is lifting the fortunes of many, including some with suspect business models. Take Martin Varsavsky’s FON for example. The company has been through some ups-and-downs, but now it has started to grow and is profitable: about €4.9 million ($6.83 million USD) in 2010.

Where is all the money coming from? Offloading of data from 3G to the Wi-Fi networks. For FON, the growth has come in the U.K. and in Japan. Nearly two million FON access routers with auto connectors to the Wi-Fi network are handed out to buyers of Android-based smartphones and the iPhones. In-Stat, a market research firm, recently predicted that by 2012, nearly half of the Wi-Fi connections from hot spots are going to come from handheld devices.

Martin said in an email that while the company is still making money selling Wi-Fi routers and Wi-Fi passes to travelers, the future growth for the company is going to come from other gadget makers who are going to auto-connect to the FON network for a year via Wi-Fi, then sell subscriptions. “For example certain multiplayer games will come with prepaid Wi-Fi access so people can play them everywhere,” says Varsavsky.

Five years ago, FON had no idea that this future would unfold, just as Biswas and Meraki had no idea the iPhone would one day be its savior. It started out as a company based on MIT’s Roofnet project, and its ambition was to sell its wireless mesh networking hardware to hotels and other establishments, particularly in non-western markets. It proved to be a tough proposition, to say the least.

In 2009, the company, which has raised over $40 million from the likes of Sequoia Capital and Google, went through a metamorphosis and shifted focus to the enterprise market. Being at the right place at the right time, the company has seen the total number of deployed networks hit 17,000 at the end of 2010. Its growth has followed the trajectory of the wireless LAN market; in 2010, WLAN sales were up 23 percent to $2.7 billion, according to Infonetics Research.

The Smartphone Boom and Network Effects

At my request to find out what devices were connecting to the networks, Meraki took a random selection of over 7 million devices (roughly a fifth of the total devices connecting to Meraki-based networks) and found the iPhone accounted for nearly a fourth of the total Wi-Fi connections.

In aggregate, Android, iPhone and iPad accounted for about 16.53 percent of the total connections in middle of March 2010. As of March 14, 2011, these three devices now account for about 33 percent of the total connections to network.

% (3/14/2010) % (9/14/2010) % (3/14/2011)
Total Devices 100.00% 100.00% 100.00%
iPhone 15.96% 21.88% 23.53%
Android 0.57% 1.30% 5.19%
iPad 0.00% 2.08% 3.41%

Why the growth? While laptops were used for wireless access, it’s difficult to walk around and use them as easily one can use a smartphone or an iPad. The smart devices encourage anywhere computing, which, in turn, puts a different load on the networks. Dominic Orr, CEO of Aruba Networks, put it best when he said, “The network model has shifted from hotspots to ubiquitous and uniform networks access.”

One of Meraki’s clients has data to show that. Westmont College, a liberal arts college campus in Santa Barbara, Calif., showed in a study that nearly 3137 distinct clients connected to the Meraki wireless network in February 2011, and about 10.12 terabytes of data wer transferred.

A year ago, the data transferred was about 5.06 TB and a total of 2458 distinct clients used the network in the month. Why? Because there was a sharp increase in the number of iPhones, iPod touches and yes, there were a few iPads too.

Where Do We Go From Here?

Biswas, who has been involved with Wi-Fi for a long time, believes a future version of Wi-Fi (IEEE 802.11 ac) is going to become an apt replacement for the gigabit Ethernet wired connections in a couple of years. Currently under development, we’re likely to see the earliest devices show up in late 2012.

But one thing he knows for sure: Wi-Fi is going to be the default network connection in our homes. Today, we might sit on the couch and be amazed at the novelty of FaceTime on an iPad, but in a few years, it will be as normal as life with Facebook.

With more devices connecting to this network, it’s only a matter of time before we see even faster wireless connections inside our homes.

This is good news for developers and innovators, who don’t have to wait for the carrier’s wireless infrastructure to catch up to their ingenuity. What are you waiting for? Time to get going!

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  1. what surprises me is not how popular wifi is but that it is not more common to have good quality shared networks. for example people living in apartments still tend to have separate internet connection for each residence each with its own router. i would have expected by now the building managers would have had a fiber link installed and blanketed the buildings with wifi that could serve the entire residence. it certainly should be cheaper for the whole that way. i even had expected that places such as gated residential communities would be blanketed in wifi to serve the resident population. and that eventually these networks would be combined to cover entire cities.

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    1. Tom

      I wonder if this is something that should be built into the routers themselves in order to get folks to share their networks – or carve our a bit of their bandwidth to share the networks.

      It would be great if this peer to peer sharing technology was open sourced and put in every router. I know this might provide a nice cover in the walkabout areas in a complex and more importantly redundancy.

      Again, I am speaking as a consumer and not an expert on the legal issues around the networks etc.

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      1. Funny, that was the original business concept for Skyhook….

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      2. That sharing feature is built into the FON routers, there is a private SSID and a public SSID that guests use to login through a splash page.

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  2. Absolutely spot on. The only challenge is in the hardware is still spotty. Setting up wireless devices is a challenge and it is still, very difficult for a lay man to set up a wi-fi network. The various protocols, understanding security layers, getting the devices to talk each other and finally the quality of the hardware. Most people don’t get what ‘firmware’ means and ask me what a struggle it has been to try and fix my Belkin N router to talk to my iPhone4.

    While the technology improves and makes for faster and more efficient data transfer speeds, there is clearly work to be done on the hardware front

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    1. Hamranhansenhansen Wednesday, March 16, 2011

      The Apple devices are easy to setup and they upgrade their own firmware through companion apps for Mac and Windows. They are consumer devices, not IT devices. You plug them in and they work.

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  3. Great article, and IMHO, it only touches on half of the equation. This only looks at the network from the outside in – data coming into your mobile device, be it a laptop, tablet, phone, brain, etc. Inside-out (Machine-to-Machine) is just as important.

    You don’t need to be a pundit to realize that the lines between meatspace and cyberspace are blurring. Smart Meters are a massive, kludgy expensive example of this – gathering realtime relevant data and feeding it to a backend. A sweet spot for WiFi implementors is to leverage this demand, by developing new standards for zero-touch configuration and pave the road to more efficient M2M communication. There are some interesting products in this market, like prescription bottles that monitor usage, but they all currently use cellular, or some proprietary system. There’s no reason to have such a chokepoint when WiFi’s become ubiquitous and free.

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    1. Adam

      Clearly, I could have gone forever, but then what would I write tomorrow ;-). Anyway you make excellent points. Using cellular as a back-up option is not such a bad idea, especially if we can come to a stage where we can logging into WiFi networks is actually fairly easy.

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  4. Hey Om, great data to support what people think has been trending re. device usage on wifi. So I buy the gigethernet wireless replacement use case at home, at work and is relatively static communities. But it would be great to here your thoughts, plus some data, on truely mobile use cases; the commute to work, the town highstreet, the mall, travelling by car. How do you see wifi boosting ubiquitous internet access for broadband services? Do you think 802.11i or u and EAP-SIMs as an example might make fixed broadband a piece of fixed line backhaul with a heterogeneous network for homogeneous coverage? Or do you think the answer will rely on more standards driven protocols

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  5. “It’s hard to imagine the phone bill if all this data was streaming over the 3G networks.”

    Unrestricted 3G is like $30/month in Sweden.

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    1. Nice! Some of us in the US have unlimited aka upto 5 GB plans for $30 a month. but it isn’t unlimited.

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      1. If you’re willing to compromise a little on the hardware end and data coverage areas, Sprint’s Virgin Mobile US has unlimited data on all plans, the cheapest of which is $25 a month.

        On a separate topic, this dovetails a bit with articles I’ve seen over the past month detailing how various carriers (cellular and home) would like to be able to charge more and/or cap data for the types of services that eat up more bandwidth: Hulu, YouTube, etc.

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      2. haha… well good point. I don’t think even they really give you unlimited data.

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    2. You know that “unlimited data” is an oxymoron… there are no free lunches. Eventually, if you consume too much data at too high a bandwidth, you will pay the extra bulk, or get choked down by your carrier.

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  6. Do you think Wi-fi is disruptive to 3G/4G? Because I do. When there will be free wifi hotspots almost everywhere in the world, 4G will only have a marginalized use. But they also need to make it more energy efficient so if you have wifi always on, your phone or tablet will still last at least a whole day.

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    1. I dont think it is an either/or situation because I think in the end you have to have both in order to get better wireless broadband. On its own, even 4G isn’t enough to deliver you all the services you want wirelessly in the future.

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  7. What about issues with scaling Wi-Fi to a large, simultaneous audience?
    For example, at conferences or in a sports arena. Unreliability will limit what we can do with it.

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    1. Justen

      We have used Meraki at one of our events — 600 people, 800 odd devices, not a problem. So I think technology exists to overcome the challenges you talk about.

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  8. If we could get wifi to do automatic handoffs we could get rid of cell phones too.

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    1. lets keep wishing…..

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  9. Arthur Pearson Wednesday, March 16, 2011

    I have five WiFi devices: iPad, iPod, PS3,Roku box, TiVo. My Kindle is 3G only. I am going to get an AirPrint printer this week, which will make six. I may get an XBox down the road. No laptop.

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    1. Jeez… and I thought I had a big device problem ;-)

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  10. Keep in mind possible unintended consequences of many device using WiFi in the same living quarters or common areas: a.) radiation exposure, b.) energy / power consumption. The forthcoming IEEE 802.11ac sounds great on paper but how much energy will be required (for the AP, from the device point of view)? Al Gore probably won’t be too happy about this.

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