Blog Post

Starbucks Starts Wi-Fi Debates, Breakfast Battles Heat Up

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Local coffee shopAll the news this week about Starbucks changing wi-fi service providers and offering anyone with a Starbucks Card two free hours of wi-fi access has started a fresh dialogue surrounding wireless Internet access. That is, your local independent coffee houses are jumping up and down saying, “Hey! The wi-fi is free (and always has been) over here!”

As you may know, independent coffee shops have long offered wi-fi as an attractant for business people, road warriors, and web workers to get them in the door. For the longest time, many coffee drinkers and wi-fi seekers chose the independent houses because getting online used to cost $6-$10 an hour at Starbucks.

When asked about whether he felt the independents would lose out on business with Starbucks recent announcement, David Blumenfeld of Boingo replied, “Many patrons of the smaller coffeehouses will continue to support their local shop due to loyalty, unique surroundings versus corporate giant, community support, convenience of location, etc.,” he said. “Any customer losses may also be offset simply because there continues to be so much more demand for Wi-Fi access in general.”

I would agree with Blumenfeld. The people who go to the independents go there because it’s in the neighborhood and because it’s a part of their routine. These customers are accustomed to their local coffee houses and will continue to patronize the same coffee houses they’ve been going to for years.

The business traveler, however, is more likely to stop into Starbucks based on familiarity with the national brand and because of Starbucks ubiquitous presence nationwide.

Battling for your breakfast dollars:

Boingo and Wayport, two of the major wi-fi subscription services our readers may be familiar with, made an announcement this week that will allow Boingo subscribers to use Wayports hotspots at McDonald’s restaurants. By doing so, Boingo is adding to it’s already 100,000 locations. There are 9,000 Wayport enabled McDonald’s restaurants, as reported by Computer World.
The battle for your business at breakfast time has been increasingly interesting, namely because Starbucks and McDonald’s are in a heated battle to attract your dollars in the morning. McDonalds recently started serving gourmet coffee, prompting Starbucks to respond by serving breakfast items (but just announced they would halt breakfast sandwich services).

Now, with Starbucks card holders getting 2 hours of free wi-fi, the Boingo announcement has McDonald’s hoping business customers will stop into McDonalds for their morning cup o’ joe and a hot cup of coffee.

(Image credit: Flickr user Dan)

7 Responses to “Starbucks Starts Wi-Fi Debates, Breakfast Battles Heat Up”

  1. Mr. Crash

    I’ve got a similar opinion to Melinda.

    Local coffee shops here are very few.
    In fact, one of the only ones that serves decent coffee happens to be stuffed in a shopping center… Which happens to be full of many, many people – predominantly school children.

    Creates a slightly less than perfect work situation with hundreds of them acting up and causing problems.

    Starbucks (here specifically) on the other hand… Can keep longer hours being outside the huge shopping center and also isn’t frequented by kids. It’s clean, quick and we don’t have the music problem mentioned by others… Probably because we don’t have the joy of satellite radio here in Australia…

    Sure the coffee isn’t as good as other places, but i’ll deal with it because it’s more readily accessible on those levels.

  2. I guess I have an “opposite” opinion… I live in the midwest, in a coffee-shop-less suburb. Let me rephrase that… Where I live, the ONLY nearby coffee shops are Starbucks. On the other side of town, about 30 minutes’ drive away from my home, there are some indie shops, but otherwise it’s all Starbucks. Free wifi is very limited… there’s an overpriced (and underflavored) pastry shop, a crowded Panera Bread, and the local library. That’s it. So I’m glad to see the free wifi returning to Starbucks, if only because I’m glad to have the option.

    Yes, there are still places that don’t have free wifi. And I’m stuck right in the middle of one!

  3. Jeffrey, I can stop in a Starbucks to get a quick thing done, but if I have any work that requires concentration it’s my last choice.

    It’s not the patrons. It’s the fact that they usually have that XM station cranked so loud I can’t think. Because the music is so loud, folks trying to have conversations think they have to shout.

    I have a T-Mobile hotspot account, and I much prefer using it at a Borders cafe where the lighting is usually better and the music, if any, is set at a low volume.

  4. I took my laptop to do some work at my local Starbuck’s yesterday as a trial run to see if it might be a good alternative to my local wi-fi cafe now that they aren’t going to gouge people for network access.

    The Starbuck’s I went to was dirty and noisy. I had a table full of foul-mouthed high school kids on one side of me and a bunch of foul-mouthed tradesmen on the other. The food still sucks. And the coffee isn’t any better than what you can get at any one of 100 locally-owned coffee shops (with free, no-strings-attached wifi) anywhere here in San Francisco.

    It’s nice that it’ll be possible to work at Starbuck’s in a pinch without having to pay T-Mobile ten bucks, but there’s very little chance that it’ll become a destination for web bedouins.