Which Will Win? Connected Gadgets or a Connected You?

novatel-mifi-2200-4xh-460Novatel Wireless said this week that it will open up its MiFi router to developers who want to build applications for the popular gadget. This means tech companies can build software that will run on the credit card-sized Wi-Fi router that uses Verizon’s or Sprint’s 3G network as its backhaul to the Internet — and essentially turns a person into a walking Wi-Fi hotspot.

Vendors are already taking advantage of the development program. James over at our sister blog jkOnTheRun wrote about Eye-Fi, which makes a Wi-Fi card that allows people to transfer photos from their camera to their PC without a cord, building a program that allows folks to send photos to the MiFi when they aren’t in a traditional hotspot. He didn’t understand why anyone would want to do this, however after talking with people in the consumer device industry and with carriers, it’s clear that they think using the MiFi as a way to connect consumer devices to a cellular network has a lot going for it. Companies making cameras, MP3 players and other portable devices that might benefit from 3G connectivity would rather consumers use MiFi or a similar device then have to embed an LTE or CDMA chip directly into their gadgets. Not only would it be cheaper for the cost-sensitive device makers, which wouldn’t have to put more expensive cellular radios in their products, but it would also mean that consumers wouldn’t have to pay for multiple subscriptions to get connectivity on a variety of devices. Instead, they would pay for an unlimited data plan from a carrier and essentially turn their purse or pocket into a Wi-Fi hotspot that travels with them wherever they go.

The downside of this is twofold. One, current MiFi data plans — which run about $60 per month for 5GB — aren’t exactly cheap. Two, carriers have expressed a desire (and have a business need) to adjust their payment plans to account for machine-to-machine connectivity. For example, AT&T’s Glen Lurie told me that for photos the carrier might try to get consumers to buy prepaid cards that allow for a certain number of photo transfers using a 3G-connected camera. For a carrier, such a program could boost margins, and be priced so it doesn’t overwhelm the data network with too much traffic.

But if the idea of consumers becoming walking hotspots is embraced by gadget makers and users alike, we could see connectivity on more of our devices sooner rather than later. Currently I use my iPod touch in conjunction with my MiFi and love it. Since the MiFi supports up to five devices, I would be excited to see what else I could add to my portfolio of WiFi-connected gadgets. At this point the only thing standing between me and ubiquitous connectivity everywhere is the 5-GB-per-month limit on my data plan and the lack of Wi-Fi chips in most of my portable devices.