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Bridging the connected age, the MiFi tops 3M sales

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Introduced in 2009, Novatel Wireless’s MiFi product line officially crossed the 3 million sold mark on Monday.

But how much more can its sales grow now that Internet sharing functionality has become a common staple in smartphones and even other connected devices? The MiFi may become a relic, albeit an important one that helped bridge a time when cellular connections weren’t as ubiqutious and connectivity wasn’t taken for granted.

Regardless, the milestone of 3 million sales is a sizable accomplishment from the mobile broadband equipment maker. And I’m not surprised, because I remember being impressed by my first look at the thin, credit-card sized device at the early 2009 CTIA trade show. It only took a few minutes to convince me that Novatel Wireless was on to something with the MiFi’s simplicity and utility: Press a button and the MiFi instantly creates a personal Wi-Fi hotspot that shares a 3G or 4G data connection.

My MiFi

I bought my own MiFi last year and have used it during travel and as a backup connection at home for when either the power or home broadband connection goes out. With the ability to connect to five Wi-Fi devices — some models can support eight devices — the MiFi has made many long car rides far less boring. Our kids connect iPads, small tablets and laptops to the mobile web for hours at a time while on the road.

Will consumers continue to follow suit and keep buying the MiFi devices, however? Although we used our MiFi quite a bit when we first bought it, our usage has dwindled considerably; some months we don’t use it at all and I’m now considering the idea of canceling our $35 month-to-month deal. Our desire to be connected while mobile hasn’t diminished — if anything, it has increased — so what changed?

Software for the win

In May of last year, my Android handset gained the same functionality as the MiFi, and my Samsung Galaxy Tab has it too. Using software in these devices, I can share a 3G connection with several Wi-Fi devices, eliminating the need to carry a MiFi at all. Because my plan allows for it, there’s no charge for this ability, although the plan is old and newer plans typically add $20 or more per month to enable this feature.

I’ve kept the MiFi since then for two reasons, and I suspect they’re the same reasons that some people will opt for a dedicated mobile hotspot instead of using their phone. For one, the hotspot feature can quickly drain a smartphone’s battery. I carry a spare battery at all times for my Android phone, but I’m likely in the minority. Using up a phone battery for MiFi-like features ends up leaving you with no Mi-Fi and no smartphone, i.e.: a useless brick. My other reason is because the MiFi is on a different network than my smartphone, which gives me some redundancy if one of the two is down.

So while there’s good reason for some to buy and use a MiFi, however, I recall some other reasons that sounded good at the time, but really haven’t come to pass. A number of times since the product’s introduction, Novatel Wireless has touted the ability of the MiFi to run unique software solutions. One example is having the device pull all of your email just before getting on a plane and then reading that mail offline after a data transfer from MiFi to laptop, for example. Ideas such as that sound good and could help add more value to the MiFi, but for now, the device is primarily known for a simple way to get online with tablets and laptops as needed.

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set 26

T-Mobile intros first 42 Mbps smartphones and hotspot

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T-Mobile announced on Monday its first two smartphones capable of fully utilizing the operator’s 42 Mbps mobile broadband network. The carrier’s version of the Samsung Galaxy S II and the HTC Amaze 4G, both Android phones, were introduced at GigaOM’s Mobilize event in San Francisco. A new 42 Mbps MiFi, the T-Mobile Sonic 4G Mobile Hotspot was also launched.

The new devices come at a time when the no. 4 U.S. carrier has spent much of this year upgrading its mobile broadband data network. In 2010, T-Mobile boosted the network to 21 Mbps speeds and wasted little time in doubling the network speeds in 2011 with HSPA+ 42 wireless capability and additional backhaul to cell sites. That’s because the carrier is seeing data consumption double every six months.

The increased speeds are helping to quickly transition T-Mobile customers to smartphones that generate increased data revenues. In a phone conversation with Cole Brodman, T-Mobile’s Chief Marketing Office, he told me that “75 percent of the phones T-Mobile sells this year will be smartphones, and of those, 90 percent are Android.”

Without an Apple iPhone, the Android figure makes sense and the overall percent of smartphones sold is higher than the industry, which is estimated to be around 55 percent of all phones sold in the U.S. this year, according to Chetan Sharma, an independent telecom analyst.

As far as the new phones themselves, the Galaxy S II will look familiar as both Sprint and AT&T have introduced their versions. One immediate difference in T-Mobile’s Galaxy S II, aside from the 42 Mbps radio, is a larger, 4.52-inch Super AMOLED Plus display.

The phone also has NFC capability, although Brodman told me the feature won’t be used at launch. Most other specifications are similar or the same: a 1.5 GHz dual-core processor (from Qualcomm, not Samsung), 16 GB of storage capacity with expansion up to 48 GB, an 8-megapixel rear camera, 2-megapixel front camera and HDMI output.

The new HTC Amaze 4G with Sense 3.0 is also a powerful smartphone, using the same 1.5 GHz dual-core CPU but with a 4.3-inch qHD (960×540 resolution) Super LCD screen. However, the HTC Amaze 4G is positioned as a top-notch camera device with simple sharing on the fast HSPA+ network.

The wide aperture f/2.2 camera — good for low-light conditions — uses an 8-megapixel sensor. A few new scene modes, similar to those found on T-Mobile’s HTC Sensation 4G, are included to enhance the image-taking experience:

  • SmartShot takes five pictures and combines the best attributes of each to capture smiles and eliminate blinking eyes.
  • ClearShot HDR creates high contrast images.
  • SweepShot captures wide panoramic views.
  • PerfectPics intelligently surfaces the best or most meaningful photos into a separate photo album.

The phone also boasts zero-shutter lag, face detection, 1080p HD video capture and a five-image BurstMode. Images can be shared natively to Facebook, Picasa and Flickr.

Those who prefer to use laptops and tablets on T-Mobile’s HSPA+ network may be interested in the Sonic 4G Mobile Hotspot. The 3.88 ounce device shares its mobile broadband connection with up to five devices over Wi-Fi and has a 32 GB microSD card slot to save and share data across the personal hotspot network. A small OLED display shows the number of connected devices, signal strength and battery life, which is estimated at 4.5 hours of continuous use.

Both new handsets will be available for online orders starting Oct. 10 with widespread retail availability two days later. T-Mobile’s Samsung Galaxy S II, is priced at $229.99 with contract and after a $50 mail-in rebate, while the HTC Amaze 4G will cost $259.99 with contract and after the same $50 mail-in rebate. T-Mobile hasn’t set a price for the Sonic 4G but expects it to be available in stores before the end of October.

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set 06

The Internet of Things isn’t a profit center … yet.

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Tablets and e-readers and connected electric meters … oh my! As device makers embed broadband into more and more gadgets, and consumer demand for ubiquitous broadband skyrockets, operators are realizing they aren’t in Kansas anymore, and traditional financial metrics and ways of running their businesses won’t cut it. The solution to an influx of devices and accelerated demand unfortunately isn’t a one-size-fits-all approach, but will require an operator to take several steps, including working more closely with device makers and application companies.

From a paper put out Tuesday by Chetan Sharma, a wireless analyst:

In 2011, the connected devices segment is growing at a 12 percent rate while the traditional device segment is growing at less than 5 percent. By 2015, we expect the connected devices segment revenues to exceed that of the prepaid segment in the US. As prices fall, connected devices will start to penetrate the developing markets as well. In fact, tablets are likely to be embraced in developing nations once we start to see $100-200 price-point in the market. It is also clear that the number of devices an operator has to launch to stay competitive will double and quadruple in the coming months and years. As such, the traditional cost models of throwing more [people] at the problem won’t be effective.

The report sums up (in 19 pages) what we’ve been writing about for a while: The shift from voice revenue to data revenue has hit some snags for operators — snags they are trying their best to repair without alienating customers. And while the Internet of things has plenty of potential both for revenue growth and profit growth, adding more devices and supporting them will stretch the operator’s infrastructure. Despite the fact that machine to machine subscriptions aren’t always the largest in terms of revenue, they can generate spectacular profits — remember that cellular-enabled medicine cap that cost $25 a MB — which means that tracking the average revenue per user may no longer be the best metric for operators.

However, as the number of devices expands, so does the opportunity for data on the network and confused customers. To deal with too much data, solutions such as Wi-Fi offload and smaller networks will help, but the real issue to handle both problems will be more intelligence. At several places in the report, Sharma discusses how devices, networks and apps will have to become more intelligent and integrated. There’s added brainpower when it comes to getting on the least congested network in terms of making the shift from Wi-Fi to 3G or 4G seamless. There’s intelligence and network awareness built into the apps that will let a user send an important PowerPoint presentation to his boss using a more reliable network than perhaps a tweet about his lunch. And there’s better integration between the device and the network, so certain items such as electric meters might send their data during times when the network is less busy.

The significant cost of managing a network is in the planning for “peak traffic capacity.” If this capacity can be managed through policy, quality of service, and congestion management, the peak time traffic costs can be lowered by 10-20 percent across the network.

Throughout the report, savings of 10 percent here and 20 percent there add up to a list of best practices that operators can choose to implement. However, it’s not all about keeping the operator happy. The paper points out that consumers are demanding family or multiple device plans for their myriad gadgets as opposed to paying for a separate plan for each one. The report hints that with Wi-Fi connectivity already embedded in many newer devices, operators could lose out on their relationship with the end user if they don’t adapt and give them plans that they want.

However, consumers have shown resistance to mobile data plan per device and instead need mobile data plans that cater to an individual or a family which has multiple devices. In a WiFi-centric connected devices world, operators need to ensure that they stay relevant and maintain a relationship with the consumer across a majority of their devices, while leveraging other available network assets to manage off-load effectively.

The report really doesn’t say this, but the sense here is that operators will have to remake their business from selling mobile phones to selling mobile access. The shift is easy to see coming, but steering a business through that change is no different from IBM realizing it has to switch from typewriters to PCs and now to services. The Sharma report lays out some of the tactical changes operators must make, but the shift from selling phones to access will also require a strategic and cultural shift as well. I plan to ask executives at Sprint and T-Mobile more about this shift at the end of this month during our Mobilize 2011 conference in San Francisco.

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lug 12

AT&T’s first LTE devices poised for summer debut

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AT&T hasn’t yet rolled out LTE service yet, but it’s coming soon. So too are the devices that can use the upgraded network, the first of which AT&T has today announced. The Mobile Hotspot Elevate 4G is a pocketable hotspot while the USBConnect Momentum 4G is a USB data stick for laptop computers; both will fall back to AT&T’s HSPA+ network in the case of inadequate LTE coverage. AT&T expects to bring LTE service to five markets this summer and an additional 10 markets by year end, covering 70 million people with faster data speeds.

Both new devices will be available “this summer” and support Microsoft Windows and Mac OS X computers. The hotspot device, $69 with contract after $50 mail-in rebate, offers a nice looking 1.77-inch display and can share its mobile broadband connection with up to five devices. The screen shows the battery status, signal strength, and data usage. For $20 less (after contract and with mail-in rebate), consumers can opt for the USB stick, which looks noticeably larger than others I’ve seen: AT&T says the dimensions are 2.6″ x 1.02″ x 0.51″. AT&T hasn’t yet announced any details on LTE pricing plans for either device.

While AT&T has taken a slower path to delivering LTE than Verizon Wireless, it’s promising to see that devices are ready and waiting for the new network. It’s also good that Mac support is available from day one, something that Verizon took time to add to its first LTE devices. I’m also keenly interested in something that has challenged Verizon: How seamless will the handoffs occur between the 3G and 4G network?

My suspicion is that AT&T’s experience will be better for one key reason. Instead of transitioning between completely different types of networks, AT&T is dealing with two GSM-based networks: HSPA+ and LTE. In contrast, Verizon’s LTE device must handoff between EVDO and LTE, which are completely different technologies. Although it will take time for AT&T to catch up to Verizon in terms of LTE coverage, the 3G / 4G handoff experience may be a key decision point for consumers.

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