Blog Post

So what will happen to Mobile Hotspots?

Yesterday, when Apple announced the new iPad, it also touted that the new iPad will be able to offer “mobile hot spot” like features, allowing you to share your super-fast wireless broadband connection with five devices. This prompted folks at to ask: did Novatel (s NVTL) and Sierra Wireless (s SWIR) get Garmin’d?

Garmin(s grmn), if you remember was a maker of GPS devices, that predictably was relegated to marginal existence by iPhone and then a range of smartphones. In other words, Garmin, the device became an app. So from that perspective, is right in asking the question. The stock market agreed as well and the shares of two companies declined.

Their question made me think about the future of mobile hotspots. Clearly, a nice market to begin with, the need for hotspots keeps decreasing as more devices such as the iPads and iPhones come packed with WiFi and mobile broadband connectivity. We are also seeing people replace laptops with the tablets on their short trips and thus decreasing the need for mobile hotspots. And the ability to share connections via the iPad(s aapl)/iPhone/Android(s goog) phone is going to kill the demand from casual hotspot owners. I am one of the casual owners — once I got the Verizon(s vz) iPhone, I stopped using my dedicated mobile hotspot device

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However, there is one problem with the Pad or phones-as-a-hotspot — battery life. The sharing kills the battery faster than Highlight app notifications. And I think this is the big edge for the dedicated hot-spot makers. They could come up with innovative designs and at the same time work on increasing the battery life of their device. I am thinking they should be taking a cue from the modem makers of the old. Remember when ISDN/DSL because a threat to their business, some modem makers started offering higher speeds by using bonding technologies. I wonder if Novatel(s nvtl) and Sierra Wireless(s swir) can provide a faster, and longer lasting wireless hotspot experience.

21 Responses to “So what will happen to Mobile Hotspots?”

  1. Hmmm. What would I rather have: a new LTE Hotspot-enabled iPad or a new Wi-Fi-only iPad AND an LTE MiFi AND $130?? The new iPad is cool — but c’mon people — you’re not going to tote around an $800 glass encased hotspot. The use cases are different.

    Anyway, who remembers WiFi Direct? Remember that was going to kill the mobile hotspot too…

    One day we’ll have embedded WWAN in everything. Until then, MiFi is a pretty cool way to get connectivity to all your devices without having to spend an additional $50-100 per device, not including the development costs, and many other ancillaries pains…

    Good discussion.

  2. Considering carriers are not only less likely to allow you to use your phone as a hotspot, over adding an additional line for data-only hotspots, I dont see the carriers making a change of heart within the first half of the year.

  3. Jordan Henderson

    I agree with Ricky above. While adding 4G to the new iPad gets lots of buzz, wiFi only devices, pads and others, will continue to be popular, especially in price sensitive devices like laptops and music players. Having a hotspot makes all your wiFi devices instantly 4G enabled without having to anchor yourself around a pricey iPad as the hub.

    Mobile hotspots also make great backup high-speed Internet to home users who might experience cable or DSL outages.

    As you said above Om, a hotspot makes sense for a family.

    I think Apple will eventually have to come out with lower-end iPads like they did with the music players and when they do, those devices will most likely be wifi only. A lot of people live and work around wifi all day and don’t need a 4G enabled device and if they do, a separate hotspot fits their needs better than a device with it baked in.

  4. King Jaramillo

    let me get this right. You are questioning an entire industry simple because a single product now has hotspot capabilities? Novatel and Sierra Wireless are now on the death watch because of this? These journalists are silly and obviously bored

  5. Mike Stead

    On my last trip to HK I popped a 3HK USIM in my unlocked MiFi, loaded it with HKD$300 = £27 of credit (***unlimited*** HSPA+ for 30 days) and went wild – MBA, iPad and 4S all connected 24/7. Did 1.5GB in 2 days, free FaceTime calls from the night markets to my wife in the UK to decide on real fake handbags, say hi to the kids etc. Voice roaming was £2/min, FaceTime in taxis for free! I couldn’t have done this with hotspot, as I needed my UK USIM in the phone to RX calls/SMS. iPhone hotspot only works if it’s plugged in and charging IMHO. And in poor coverage you aint gonna want to stand next to a window to keep the phone connected to 3G. James’ use case is spot on (we have the same commute ;-)

  6. I wouldn’t be writing mobile hotspots off so quickly Om. You’ve obviously said you’re just a casual user, but mobile professionals who are on the road daily would disagree.

    For one thing, they fit in my front shirt pocket easily, meaning that I need not have to “carry” anything extra. I don’t sap the battery on my devices when I am on 4G and I can easily recharge the device using just a compact mobile battery pack. I can also forgo having a data plan on my smartphone and use a cheap prepaid SIM for no-compromise connectivity. A mobile hotspot can turn any gadget (smartphone/netbook/slate) into a 4G capable device, and will work with future purchases as well (newer notebooks/slates) making it a smart investment.

    The biggest advantage of going with a mobile hotspot, however, lies in the data plan – $50/month gets you unlimited 4G from Clear without any overage charges or data caps. Mobile professionals depend on an always-on connection and won’t be counting geebees for the work that they do. That’s a big point consumer-focused gadget makers and carriers have forgotten as of late!

  7. Jason Kichline

    I wouldn’t have bought a MiFi device just because it’s something else I would have carried around. However when I ordered the new iPad, I added the radio mostly to have MiFi ability. In otherwords, I didn’t purchase another device, but it was something I wanted and I felt the deal was good. That plus I don’t need to have a plan and can pay $30 for a month when I need it. I went with Verizon and they are doing the hotspot for the cost they quoted (and they should since there’s a data cap anyway)

    • King Jaramillo

      the beauty of an independent mi-fi device is that it fits into my pocket and i can not think about it. I have a mifi device installed under the dash in my truck, i have little interest in installing and operating my ipad in my truck just to supple connectivity to others (or myself) that may need it. It’s all a matter of convenience, I see the ongoing need and desire for people to use these stand alone devices

  8. Interesting post – Hotspot capable devices beyond dedicated hotspot devices have been around for a while. The iPad offering it is nothing new. As for Garmin – their business has been on the increase over the past couple of years. The advent of “apps” that allow the company to increase their sales into new markets has only helped them, not hurt them.

  9. Michael Elling

    I think the iPad will kill McDonalds soon cause it’ll be serving burgers and fries. Geez. What just happened that was so revolutionary? This is sensationalist, slanted and poorly written journalism on so many fronts. Talk more about how messed up the carrier plans are and why they need to rethink their business models with iPad and iPhone5 on LTE (which is about 4-5 years behind the capacity demand curve already!).

  10. Have you looked at Garmin stock lately? Up 40-ish% so I wouldn’t use them as an avatar for technology roadkill. Having said that, I still keep my single function devices mostly for the battery life. I also carry a bag full of spare batteries and chargers.

  11. Steve K

    With data caps, surcharges and all, I would be thinking the other way. More WiFi hotspots means less 3/4G data transfers to pay for. I’ve seen several articles on this blog about migrating bandwidth off of cell networks and onto WiFi in order to manage the amount of data being shuttled around. This post seems to contradict that trend.

  12. I have a CLEAR Wireless 4G hotspot that is unlimited for $50/month and lets me stream for 6 hours. It is worth the cash layout, and more power economical than using the iPad as a hotspot

  13. Cold Water

    They might be dead if wireless carriers finally start billing your account by the megabyte, not per device.

    But still, I have a friend with a cabin home and a farm; neither one of them has cable or DSL coming his way. That doesn’t mean you have to be a Luddite—some things could still use wireless interconnectivity, and you might as well throw LTE on that access point so you don’t need discrete radios for EVERYTHING that wants Internet access.

  14. James Body

    I make daily use of my HSDPA capable MiFi during my daily railway commute (1hr 45 mins in each direction). The MiFi provides WiFi Internet access to my wide variety of networked devices along with those of ‘guests’ (usually in exchange for offerings from the refreshment trolley).

    The Huawei E586 that I use has just about the best 3G radio I have come across – and it’s performance is superb, enhanced by the ball of BluTack sticky stuff which enables me to fix it high on the window – away from the noisy computers.

    Whilst I am sure that the RF engineering in the iPad 3 will be executed extremely competently, I would doubt that it will outperform my remotely sited MiFi.

    Also, the MiFi can operate for over 4 hours without recharge whilst travelling at high speed – I have no data on how the iPad 3 power budget works out, but it is clear that heavy use of wireless hotspot ( which will keep the 3G/LTE radio lit up and will prevent the clever power saving systems from hibernating the power consuming bits of the iPad.

    For the time being I think that I will be unlikely to use built in hotspot capability in any scenarios other than fallback when the MiFi is inoperable.

  15. Casper

    Garmin is not dead, you might have decided to use your phone as a GPS, but there are still no apps available which can compete with a dedicated GPS.

    And you have been able to create mobile hotspots for some time, just now with an iPhone…. In this Apple actually did not create anything with iOS 5 / iPad 3, just making something possible which other vendors have been doing for some time…

    • Casper

      The way I see it, iPhone/Android have taken growth opportunities away from Garmin which has to deal with the growth and essentially change as a company and focusing on different verticals.

      I think the question is what does “personal hot-spotting” become popular enough to have an impact on sales of dedicated devices.

  16. Honestly, I think the other factor here is price. It’s an extra $130 just to get the baked-in 4G on the new iPad. That’s a bit crazy when you can pick up a prepaid MiFi for the same price (or get one on-contract for free), and have the same monthly plan.

    Also, notice that Apple said the mobile hotspot would be available ‘if the carrier supports it’ (loosely translated: when the carriers decide how much extra it’ll cost). Stand-alone MiFi’s just have the one data price, and they already have that functionality.

    There is also the battery issue, which you mentioned above, as well – why kill the battery on my iPad when I can kill the battery on my MiFi and then still use my iPad while the MiFi charges?

    • Really good points. I was using the WiFI iPad (version 1) for a while but decided to go for 3G when I upgraded. I found the convenience was just too much as I often carried only the iPad and no other device.

      That said, I totally see your point, especially if you are part of a family.