AT&T’s experience with Wi-Fi underscores the technology’s explosion. For the first three months of 2009, AT&T reported 10.5 million Wi-Fi connections, more than triple the amount for the first quarter of 2008, and more than half the 20 million total Wi-Fi connections in all of 2008.
|
The carrier’s most recent fiscal quart indicates even more growth. "Through the end of May, we did as many connections as we did for the entire year last year," says Dennis Whiteside, AT&T assistant vice president for consumer markets.
Of course, several factors account for that soaring usage. AT&T acquired WayPort, a Wi-Fi provider, which increased the number of AT&T’s available hot spots by 80,000. And then there’s the way certain devices (i.e. the iPhone and the iPod touch) have dramatically changed Wi-Fi use case scenarios. “When we saw the iPhone come along, it kind of changed the whole perspective for us,” Whiteside says.
The impact of smartphone adoption on the number of Wi-Fi connections cannot be underestimated, says Frank Dickson, vice president of mobile research at In-Stat Mobile. In-Stat projects 20 percent of Wi-Fi chipsets shipped in 2010 will be for enabling smartphones.
The Curious Case of the BlackBerry
Apparently, BlackBerry maker Research In Motion (RIM) didn’t get the memo on Wi-Fi. The first Storm didn’t have Wi-Fi, and the more recently launched BlackBerry Tour on the Sprint and Verizon Wireless networks doesn’t include Wi-Fi, either. While the new BlackBerry touts impressive specs and seamless global roaming, RIM left out what is becoming a “no-brainer” for most OEMs.
|
When asked why he thought RIM might have refrained from including Wi-Fi in its most recent addition to the BlackBerry line, Dickson cites a couple of factors. “I don’t know what RIM would accomplish by leaving out Wi-Fi, other than it creates a cost or maybe it’s not enterprise friendly. If you’ve got a RIM device and that BlackBerry has Wi-Fi, it’s possible it could be an IT problem, possibly security related,” Dickson says.
However, given the results of a recent survey conducted by Decipher on behalf of Devicescape, a company that provides Wi-Fi solutions, it may be more costly for an OEM to omit the Wi-Fi antenna. It appears Wi-Fi isn’t just another dispensable technology anymore.
|
"It's gone from being predominately a business product to something that all users want to use, and I would imagine the iPhone definitely drove that trend,” says Simon Wynn, vice president of products for Devicescape. Wynn said that 96 percent of respondents expect Wi-Fi on their device. Eighty-one percent of respondents prefer using Wi-Fi to 3G for browsing Web sites, downloading data, Google searches and sending e-mail.
Edgar Figorella, executive director of the Wi-Fi Alliance, agrees that Wi-Fi is starting to influence consumer choice when it comes to smartphone purchases. "There's a tremendous demand from end users…Wi-Fi is becoming a driver now…smartphones with Wi-Fi are outpacing by 2 to 1 smartphones without Wi-Fi,” Figorella says, citing a recent report from ABI Research that projects that 90 percent of smartphones will be Wi-Fi-enabled by 2014.
Wi-Fi Free for All?
Wi-Fi established itself as a technology mainly used by the enterprise community. However, as more and more smartphone users log into YouTube and place calls on VoIP services, Wi-Fi isn’t just for the executive checking his or her e-mail at the airport anymore.
"I was just talking to someone in Corpus Christi, where they’ve come to think of Wi-Fi as a public utility. Its value, if anything, continues to increase, and I think you can expect to find increasing numbers of hot spots,” Figorella says.
But while Wi-Fi’s ubiquity paired with increasing popularity can be seen as a good thing, Wynn says certain perceptions about the technology create unique challenges. “More than 50 percent of our respondents will only use free Wi-Fi," he says, noting the importance going forward that the customer view the service either as incredibly cheap or free.
Business Model for the Future
The Devicescape survey captures a snapshot of a technology that has achieved incredible adoption, but to such an extent that its core user base now thinks of it as a free service. Those working within the Wi-Fi market are admittedly concerned about a lack of profitability around a service that has demonstrated high value to its users.
The future of Wi-Fi seems dependent upon at least the perception that the service is free and always available. Carriers may be betting on a slight of hand to help along the illusion of free Wi-Fi connectivity. By bundling the service with broadband and cellular service, the carrier can bury the cost of Wi-Fi into its pricing, while still reaping the benefits of cheap backhaul and satisfying customers’ desire for prolific Wi-Fi access.
 |
Source: Decipher on behalf of Devicescape |
As for reach, reciprocal partnerships between broadband and cellular providers are increasing the Wi-Fi network exponentially. For instance, Qwest Broadband and AT&T now have a reciprocal agreement that allows customers of either provider to use the other’s Wi-Fi hot spots across the United States.
But smaller, innovative companies like Devicescape believe there’s yet another way of providing Wi-Fi. While half of respondents to the Devicescape survey said they won’t pay for Wi-Fi, most said they would agree to sharing their Wi-Fi connection within a network community like Devicescape’s.
"A majority of users are willing to open and share their network as long as some security parameters are in place,” Wynn says, noting that over 60 percent of respondents said they were open to that kind of agreement.
Devicescape decided to run with that idea and is now asking individuals who use its free Wi-Fi location software to geo-tag and report free Wi-Fi hot spots around the globe. The idea is that Devicescape can then offer its users a low-cost subscription-based application that acts as a gateway to a network of known, open Wi-Fi hot spots.
In-Stat’s Dickson says he thinks Wi-Fi will thrive in a number of different forms. “I think you’re going to see a mixture – paid and free. There’s some areas where you’re starting to see a demand for free Wi-Fi coverage,” he says, noting hotels and cafes that offer the service for free as an incentive to customers. “But then there’s some areas where you simply need to monetize it,” he adds.
Regardless of how users access the Internet while mobile, the bottom line is they want to do it from anywhere and as cheaply as possible. Wynn acknowledges that fact. “In the end, what we’ve found is that it’s really not about 3G or Wi-Fi. Users just want connectivity. They don’t really care what technology they’re using.”
By Andrew Berg
