Goodbye MiFi, Hello Smartphone Mobile Hotspot


Wednesday’s anticipated Verizon (s vz) iPhone (s aapl) launch event offered one surprise: users can share the 3G data connection with five devices, turning the iPhone into a mobile hotspot. Since the functionality is built into iOS, it’s likely the AT&T iPhone will see the same (s t), although it’s up to the carrier to offer such a feature. This all follows last week’s Consumer Electronics Show, where the four newest Verizon phones, all running Android and supporting Verizon’s LTE network, will also offer mobile hotspot functionality. With the trend towards using a phone as a hotspot, sales of standalone products such as the Novatel Wireless MiFi (s nvtl) products could be at risk.

Using data from the Novatel Wireless investors site and press releases, I charted the reported revenues from MiFi sales since the company’s second fiscal quarter in 2009, which was the first quarter I could find with MiFi sales information. Data wasn’t provided for the last quarter in 2009, so I estimated it based on the company’s reported revenue mix of Mi-Fi devices versus other revenues. Even if my estimate that quarter is low, the MiFi sales revenue trend is flat to down at a time where connectivity needs are rising.

When I saw my first MiFi back in January 2009, I thought it was a completely innovative product: one small device with one data plan supplies the mobile broadband connection to five or more devices over Wi-Fi. I liked it so much that I bought one on Verizon’s network, and to this day, I still have it and pay $35 for 3 GB of monthly data. Now that the MiFi is entering a third year of availability at a time when mobile broadband subscribers are about to surpass wired broadband subscribers, you’d think there would be an increasing number of MiFi customers like myself. But there aren’t.

Part of any downward trend in sales could be attributable to lower device pricing, but even so, I’d expect the trend to at least be flat in that case: lower prices should make the device more attractive to carriers and customers and therefore revenues would likely still increase. I think that people still don’t know what a MiFi is, which could be hurting adoption. In any case, exact sales numbers in terms of units aren’t available, so let’s consider my chart to be a reasonable proxy.

On top of the lack of MiFi sales growth are the growing number of devices that can be used as a hotspot. In my particular case, both my phone and my tablet can share their 3G connection. In fact, I took my standlone MiFi to CES last week but never fired it up because I have the same functionality duplicated in two other devices that I already had with me. As more handsets include the ability to share a connection, even with an additional fee, a MiFi device seems less attractive.

There’s a few arguments against this line of thought, and of course, each individual’s mobile needs will vary; if a MiFi works for you, then you should keep using it. Using a phone or tablet as a mobile broadband hotspot certainly causes the battery level to drop faster. For this reason, I use one of my mobile mantras: Always buy and carry a spare battery for any mobile device if you can. Toting a second battery for my phone, for example occupies less space and weighs less than the MiFi.

However, devices based on CDMA network technology, such as all of Verizon’s current handset lineup, including the new iPhone (s aapl), can’t be a hotspot and take calls at the same time. That’s another point in favor of the MiFi, but as Verizon moves smartphones to its LTE network this year, the problem could be mitigated in the future if voice traffic flows on CDMA while data stays on LTE. That may not happen until voice standards are implemented for LTE, however, so Verizon voice could rely on CS Fallback from LTE back to CDMA, which would still preclude simultaneous voice and data.

[polldaddy poll=4377938]

Novatel Wireless (s nvtl), which has bet big on the MiFi solution, is trying to add value to the device by adding the ability to run apps, but in the long run, I don’t think that will matter. I haven’t yet seen a MiFi app that adds more value to a similar existing feature on a smartphone, for example. For many consumers then, even some that have never even heard of a MiFi, using a smartphone as a mobile hotspot is the more likely future; the window of opportunity for the MiFi is slowly closing, because the function is being absorbed by the smartphone.

Based on the CES experience of not using my MiFi, I’m likely to close down the month-to-month account and simply rely on my phone and tablet to provide 3G data to other devices. But we all have different needs, so I’m curious if you’re in the same boat or you plan to get or keep using a MiFi device. Have it in our poll!

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Hmm. I have been wanting to buy a smartphone since the first iphone came out. At the time, it was just a little too rich for my blood. Now, I can well afford the phone, but the idea of shelling out $60+/mo just gives me the yips. I have voip at home, (I make intl calls on my prepaid at skype prices + price of a local call) and a prepaid phone for the meager voice I used each month (~$15/mo) which is set up with SkypeToGo (so I can make intl calls at skype prices + the cost of a local call). Oh yeah, and with my job I’m parked in front of a computer all day long. I’m giving this background to explain my reluctance to sign a contract.

BUT it occurred to me recently that if I buy an unlocked smartphone, say with T-mobile (who has the best pricing on prepaid minutes), I can pick up the MiFi and use Virgin Mobile’s $40/mo unlimited 3G broadband to go. So, for the cost of an unlocked cellphone + $175 MiFi + recurring $40/mo, I can have a smartphone + unlimited data + NO Contract.

Can any of you see anything wrong with my thinking? Thanks.


A standalone MiFi is a purpose built device which has routing functionality. Also some models have LED screens that provide key operating information that anybody sharing a data connection needs to know. Smartphone hotspots are too basic.

Lorie Ghamy

For 20 $, MyWi on jailbreaked iPhone is a real winner!

No need to give more money to my 3G provider. Over 2 gig a month, the service slow down but stay with no limits. The trick for surfing beyong this point is to lock Google Mobilizer. Web pages are compressed for a light surf…. Text and (or not) photos….


I don’t get the big deal about this, I’ve been using a Nokia to tether to a computer for free on AT&T for almost 5 years, and I’ve had a Nokia phone for over a year (they’ve been available much longer) that can act as a hotspot w/ Joiku app. Why do people go nuts over Apple doing something that’s been done for so long? Oh yeah, it’s shinier…

Kevin C. Tofel

Ken, short of the iPhone mention in the paragraph to set the story up, nothing about this post is distinctly about Apple, so I really don’t understand the criticism. In fact, I specifically mention my 2 Android devices used as hotspots for the past year. ;)

The story is about the growing number of handsets that can be used as hotspots (yes, Nokia phones too) and the impact on standalone mobile hotspot devices. Any thoughts on that?


OK you are right, I read this article from a link on another article that was creaming over the idea of using an iphone as a hotspot as if it had never been done before. I guess my real point was that this is possible without paying an extra service fee. I do use a phone I purchased without a subsidy (sort of, I bought an iphone4 subsidized and sold it for a good profit). Yes a jailbroken iphone could do it too, which is also along my point that you don’t need to pay for this feature, but every article that describes it mentions the extra service fees that would be needed.


Oh and one more thing worth mentioning that you did not in this article if comparing phone hotspot to a Mifi or something similar, using 3G sucks battery life down as we all know, but adding a wifi broadcast REALLY sucks it down if you’re streaming heavy data.

Dave D

Is it true that some phones that have hotspot capability can only create ad-hoc networks vs infrastructure? I’ve heard this on forums but its hard to determine from official phone specs if this is true or not.


I have had my MiFi for 2 years and love it. The biggest benefit: I can make a hotspot wherever I go, as long as there is a signal. Plus, I use a VPN many times for my work, and I cannot connect to my VPN through many open WiFi spots, like airports.

I like the extra battery idea to cover the extra drainage, but until it can be a hotspot and accept/make calls, I will stick with my MiFi.


For me, there’s no question: MiFi. My case is somewhat specific, though – I live in an area where there’s no wired broadband access, so the only way I can get a decent-speed connection at home is through a mobile connection. My wife and I both use that connection, but only one of us has a smartphone; if we relied on it as our only hotspot device, I’d have no Internet access while she was out of the house.

John Pugh

When the MiFi first came out I thought it was a good idea and hoped my carrier, AT&T, would soon follow. Not the case but that was rectified when I bought my Nexus One in July. It was a good feature that became a great one when I found myself needing to be connected but without a wireless signal. Nexus One saved the day! Moreover, I don’t have to pay an additional fee for the privilege of using a feature already incorporated into my phone.

All of the phones entering the market now are underlining this feature and I say, “dude, you’re late”. My Nexus One is a veritable Swiss Army knife of features supported by the Android market. Oh, and did I mention I’m not under contract?

Welcome to my world American consumers!


Many import phones such as my HTC Touch Pro 2 don’t work on US 3G frequencies, so a hotspot device is the only solution. More so, a 4G hotspot such as the one from Clearwire can still keep older 2G/3G devices 4G compatible.

Kevin C. Tofel

True, but do you think import phones make up a significant amount of the U.S. smartphone market? I’m thinking not – we’re (sadly) a nation addicted to subsidized smartphones. ;)


Yep, and you mention a third point there. But subsidized means committing to a two-year contract. Unfortunately, the way devices and service plans keep changing (cough VM), the toy you buy today could be obsolete in six months, let alone two years down the road.

If money wasn’t a factor, I’d happily change devices every six months. Except my smartphone cost me north of $400 (your N1 wasn’t cheap either), and I’m not ready to throw out my investment that fast. Paying a $200 ETF to get out of a 2-year contract after 6 months could also bring you there, if the price of the subsidized device was $200.

Fortunately I’m on prepaid voice, my smartphone is fully paid, I’m happy with the device, and I have no contract to worry about. The issue comes when I need data. VM had a great solution, until they changed it, and Sprint could also cut it’s unlimited 4G service this year too.

I’m more inclined to place my bet on Clearwire. It’s the only carrier offering home 4G service, the nature of which would entail an unlimited feed, combined with a 4G hotspot device. I’ll have my review of their service up on my blog real soon!


As a retiree and iPod touch owner I get by with Wi-Fi @ McDonalds, Starbucks, Barnes and Noble, and the local library when I am out and about. However, for us frugal touch owners, a WiFi Puck without a contract would be a viable option.


Personally, I neve saw the need for a MiFi device. Besides the ability of my mobiles to do this for a number of years (and devices), it seemed less mobile-enabling to carry the MiFi, a mobile, and whatever else I wanted to connect to it. Using the smartphone, especially where and when there were no carrier hooks to doing so, felt the more efficient option.

I’d be interested in knowing the numbers behind MiFi users, typical use profiles, and any churn (between MiFi and mobiles with this ability) from that group. I doubt that it is a large group, but it would show some interesting data for a certain set of user.

D Harvey

Have you considered that Novatel is selling an embedded product to these carriers to create this mobile hotspot and thus making money on that proposition?

Kevin C. Tofel

Just so I understand: you’re thinking that carriers are using a Novatel Wireless embedded radio in smartphones to enable them to be mobile hotspots, right? Based on teardowns of devices that have the feature, I haven’t seen that to be the case, but it could be happening in some smartphones.

Neither my Nexus One nor my Galaxy Tab use a Novetel Wireless embedded solution (that I know of) but both can be mobile hotspots, so it’s certainly not an exclusive radio solution.

Richard Brennan

Yeah – my Droid Incredible has the same capability. But it won’t turn the feature on until you agree to pay Verizon $20/month for the privilege of using bandwidth for which you are already paying (i.e. the data cap doesn’t change by adding the Hotspot service). It seems somewhat disingenuous to tout that Mobile Hotspot is “built in to the phone”, when you don’t let the user turn it on unless you fork out an additional $240 a year.

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