Portable mobile hotspots in the form of dedicated Mi-Fi devices and smartphone tethering will remain as complementary services and limited to the technologically-savvy crowd due to challenges from telcos and consumers, said an analyst.
In an e-mail interview with ZDNet Asia, Bryan Wang, associate vice president, connectivity and China research at Springboard Research, said many consumers are not aware of Mi-Fi or its ability to function as a 3G Wi-Fi hotspot. Compared with 3G USB dongles, shipment of Mi-Fi devices is still much smaller as total shipment is not expected to exceed 2 to 3 million units this year, he added.
Unlike a 3G USB dongle, which provides 3G Internet connection to one device, a Mi-Fi device creates a mobile hotspot to allow more devices to connect to a 3G cellular Internet service. Certain smartphones also have the ability to be turned into a Mi-Fi-like device. Google Android's recent 2.2 Froyo update allows users to share their 3G Internet connection with other devices in what is called tethering. Apple's iOS also includes such a function. However, Microsoft's newly rebooted mobile operating system, Windows Phone 7, reportedly does not support tethering.
Mi-Fi adoption faces several hurdles from telcos and consumers, said Wang. "Although many telcos provide unlimited data packages, they like to encourage consumers to buy multiple data SIM cards for laptops, iPads and other mobile Internet devices," he said.
He added that some telcos may ban smartphone tethering or come out with SIM cards locked to USB devices or micro-SIM cards that can be used for only certain devices.
On the consumer end, Mi-Fi devices face challenges from consumer behavior, said Wang. Pointing to the Apple iPad, he said that while users understand the functions of a Mi-Fi device, they are still willing to pay more for a 3G-enabled iPad despite the former's lower price and ability to share a 3G connection. "Consumers [want] to get 3G connections as soon as they can when they are outside," he said.
"Therefore, we see Mi-Fi [as] a complementary product for a certain segment of consumers who are mostly tech-savvy," he added.
Despite Wang's somber forecast, Singapore telco MobileOne (M1) has reported "a good number" of customers subscribing to its Mi-Fi data plans. Chief marketing officer P. Subramaniam told ZDNet Asia in an e-mail that users choose Mi-Fi for its convenience, portability and ability to connect to a number of devices at a go.
The telco has not seen a rise in users employing smartphone tethering, he noted, explaining that customers may still prefer a dedicated device so that the regular services on their smartphones are not disrupted.
Chinese telecom equipment maker Huawei does not see Mi-Fi devices and smartphone tethering function as competing products, but as distinct gadgets serving different needs. This may explain why the company, which manufactures Mi-Fi devices, has been promoting its smartphone's capability to tether.
A spokesperson told ZDNet Asia in an e-mail that a Mi-Fi device is designed solely to provide Internet connection for Wi-Fi-enabled products, while smartphones are able to do much more than that.