People Want Mobile Broadband, But Not Personal Hotspots

Global sales of mobile broadband devices rose 55 percent in 2009 over the previous year, according to a recent Infonetics Research report, even despite the effects of the economic downturn. Even more surprising, however, was that sales of personal hotspots such as Novatel’s MiFi fell 28 percent.

As 3G technologies transition to faster speeds and fourth-generation wireless networks are launched, it makes sense that overall sales of mobile broadband devices would — but convenient personal hotspot sales should be on the rise, too. In fact I would have expected them to have been increasing at a faster rate than other 3G solutions like embedded modules inside laptops or USB dongles. These pocket-sized personal hotspots connect to the web just like their USB counterparts, but easily share that pipe with several other devices over a Wi-Fi connection — usually for the same monthly fee. With the ubiquity of Wi-Fi radios in computers, phones and even consumer electronics (think handheld games and digital cameras), a personal hotspot makes far more financial sense. And that shared connection adds value to existing devices that can leverage it.

User confusion about personal hotspots may be one reason for decreasing sales. Whenever I take the MiFi out at coffee shops or around other people, I’m invariably asked what it is and what it does. Although these small routers debuted just prior to the January 2009 Consumer Electronics Show, people simply don’t know about them — a point driven home by Novatel in an earnings call.

Is this lack of knowledge encouraged by carriers? With the same monthly fee as a single-use 3G solution, I have to wonder how actively carriers promoting the MiFi devices. Why sell one mobile broadband enabler that shares the connection when you can sell multiple solutions and multiply revenues?

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Image courtesy of Novatel Wireless