Will iPhone’s Personal Hotspot Make the 3G iPad Irrelevant?

Verizon (s vz) announced the iPhone’s ability to act as a personal hotspot Jan. 11, but yesterday’s release of the iOS 4.3 beta confirmed that the feature will eventually make its way out to all iPhones (s aapl), minus legacy devices — carriers willing. With the hotspot enabled, you can share your data connection with multiple Wi-Fi devices, including the iPad, something which wasn’t possible through wired USB or Bluetooth tethering.

I realized immediately that not only do I no longer need a MiFi, as Kevin pointed out yesterday, but I no longer even need the 3G in my Wi-Fi + 3G iPad. I use the iPad’s cellular data connection sparingly as it is, and I’ve never run into a situation where I had my iPad but not my iPhone while on a trip or out and about. And not renewing my iPad data contract will save me at least $30 every month with my provider here in Canada.

Canadian providers don’t charge extra for tethering services, unlike in the U.S. But even when you are charged extra to enable personal hotspot features, which is a better proposition? An extra $30 for a shared connection that you can use with any device, including notebook computers or the iPod touch, or roughly the same amount of money for a whole other data plan locked to a single gadget?

AT&T may only be “evaluating” the feature at the moment, but eventually it’ll have to give in, just as it did with tethering, and I’m willing to bet it won’t take the company as long this time around. In fact, once Verizon (s vz) announces its own pricing scheme for iPhone hotspots, or, failing that, once AT&T (s t) begins hemorrhaging customers and freeing up bandwidth on its data network, we’ll see the feature on both carriers.

Once personal hotspot capabilities make it out to all iPhones, the question quickly becomes: Why have a 3G-enabled iPad at all? Buying the Wi-Fi-only model will save you $130, which can be spent on the next model up in terms of storage capacity, while still saving $30.

Apple could still make the 3G iPad desirable to consumers by allowing it to act as a personal hotspot, but the iOS 4.3 beta shows no indication that Apple intends to go back on its current “no tethering policy” for the device. Even if the iPad were to gain hotspot abilities (which it might to keep feature parity with Android (s goog) tablets), it still wouldn’t hold as much appeal as the iPhone, or any Android device with the same feature, since it’s far less portable and unlikely to be carried by most people during the course of a normal day.

My next iPad will be Wi-Fi only, provided Apple continues to offer a non-3G option in its next generation tablet. As Stacey foresaw more than a year ago, consumers will only need (and likely have budget for) one cellular network-connected device that can share to a variety of Wi-Fi hangers-on, and all indications point to that device being the iPhone for those operating in Apple’s mobile ecosystem, not the iPad.

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