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Is the MiFi Model the Future of Mobile Broadband?

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In January 2009, I got my first glimpse of a new device from Novatel Wireless (s nvtl) 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 (s 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 (s aapl), 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 (s 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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25 Responses to “Is the MiFi Model the Future of Mobile Broadband?”

    • DB, Gregory d, and others above,

      I think you hit the nail on the head. Most that are complaining are confusing the plan with the device. That’s common in the U.S. where many think the hardware actually comes from the carriers.

      I’m using the Virgin Mobile MiFi 2020 with an HTC HD2 that a bought in England over a year ago and that’s now running a XDA-Developers Andriod ROM. For voice I use a T-Mobile ToGo SIM. For that, I buy refills off eBay, no taxes or fees and at a significant discount, as needed. Normally, for broadband, I use WiFi at home and work. However, on those occasions when I know I’ll be out of range of free WiFi, on trips for example, I fire up the MiFi, again as needed.

      My mobile bottom line is this: I have no contracts, I can choose any unlocked smartphone I want as long as it’s GSM and supports WiFi, pay no monthly bills, normally pay no taxes or fees, and get the same features a smart phone on contract from a carrier would give me, all for approximately 50% – %80 less than a carrier’s smartphone TCO.

      That ladies and gentlemen is the point of MiFi, at least as it currently comes from Virgin Mobile. I hope they come out with a 4G version soon.

      P.S. For all those complaining about battery life: the MiFi’s batter is user replaceable for gosh sakes! Even if it wasn’t, there’s a million solutions out there if your can’t hookup to the power grid.

  1. Gregory d

    I bought it and i have to say i love it. doesn’t everyone know that the wifi works and never runs down the battery if its plugged into the wall yes the battery life is short but hey plug it in a wall outlet with the cord provided put it in a central location in the house and your set ….. everyone keeps saying battery life lol most places have wall outlets and cars have things called power outlets that either you can buy a cig. adpt. for the mifi or u can use the provided wall outlet and just buy a 20$ ac/dc converter that plugs into the car power outlet that has mulitpl uses such as charging the pc as well or phones

  2. MobileWatch

    The Palm Pre running webOS was the first smartphone that lead the market with the ability to turn the device into a portable wireless router or WiFi. Now the same technology is being heavily marketed across the Android platform. Inevitably, other smartphones will soon follow.

    • Huh? ‘First smartphone that lead the market..’

      This statement really doesn’t mean anything, since it really only hints that there were some recent articles written regarding the hotspot capabilities of webOS on the Pre. Truth be told, many handsets running windows mobile could already do this out of the box for two or three years prior to the arrival of the webOS.

  3. I’ve had a MiFi for 5 months now. I went with Virgin mobile which has very reasonable pay as you go plans that can be topped off and no contract. I use the MiFi in a pinch like when I can’t get free WiFi while traveling, or when our ISP goes down. I do agree a battery meter would be a plus but for overall use with multiple I am pleased with Novatel and Virgin.

  4. UncleMatt

    While I agree 100% with the spirit of the article, I have to say the the MiFi (in reality) is the worst piece of technology I’ve ever owned. I hate it.

    – There is no visual display of remaining battery life. Just a green light that turns red at critical remaining level.
    – Yet another charging cable to carry. And this thing requires high voltage, so most of my travel chargers DO NOT work. I’ve tried many, many slim chargers.
    – Batter packs usually do not work with it.
    – Charging via USB renders the hotspot crippled. I.e. it only tethers to the laptop during USB charging.
    – Requires crappy software installation if you even want to charge it via USB. Won’t charge without the embedded software. While there are Mac and Win versions of the software, Linux folks are left out in the cold. Not that I want to run it anyway.

    With phone tethering becoming more and more of a reality, I plan to throw this thing from the highest window I can find very soon.

    But, yes, I agree that one stop access is far, far better than embedded connections on every single device we carry.

  5. jcavanagh

    The MiFi seems like the perfect device for anyone doing business on the road with multiple devices except for one problem, once you leave your country you are probably subject to roaming charges which make it a poor choice economically in a place like Europe where business people frequently jump between countries. When I can pay a reasonable fee per Mb all over the EU and the US I will invest in a data plan for a device that grants all my devices a mobile personal hotspot.

  6. 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?

  7. 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.

  8. Henry Tsau

    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).

    • 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.

    • 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.

  9. 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.

  10. 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.

  11. 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.

    • 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.

  12. 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.

    • 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.