Some Hard Facts About Wi-Fi and Its Future

One of the greatest things about the new iPad 2 is FaceTime, a super-simple video chatting app and service that allows you to well talk to anyone else who has the FaceTime on the devices — iPhone, iPod touch (with camera), iPad 2 and a Mac. I’ve been using it incessantly, while sitting on my couch, chatting up a storm with the loved ones.

FaceTime is an app built for the Wi-Fi network. It’s hard to imagine the phone bill if all this data was streaming over the 3G networks. And the same goes for Netflix, Hulu, Spotify and Pandora, which are key parts of our new connected digital life. These services have blossomed, thanks in part to the increasing ubiquity of the Wi-Fi network.

Applications such as these, not to mention our desire to check out tweets, Facebook friends, watch YouTube videos and occasionally even do work, has doubled the network traffic on the wireless networks since last year. These networks use gear from companies such as San Francisco-based wireless gear maker, Meraki. That traffic is expected to double every year, according to Sanjit Biswas, CEO and co-founder of Meraki.

Multiple Device Wi-Fi World

“We used to have one device on Wi-Fi: our laptop,” says Biswas. “Then we had two devices — laptop and our phones using the Wi-Fi.” Soon, we will have multiple devices that are piggybacking off the Wi-Fi based network connections.

Biswas predicts that by 2012, we will have between four and five devices around us with Wi-Fi built into them. (I actually have more than that even now: a phone, a tablet, a computer; an Internet-connected set-top box (Apple TV) and a digital camera with Eye-Fi.) Tomorrow, it wouldn’t be preposterous to imagine your microwave communing with a server over a wireless connection.

It’s quite a remarkable change. I remember buying Lucent-made Orinoco PCMCIA cards for an early variant of Wi-Fi and networking hubs with limited coverage. I used to wonder when it would really be possible for me to sit on my couch and get a decent Internet connection. That of course was in the last century; today, Wi-Fi is ubiquitous, and we want continuous coverage of at least 10 Mbps from our Wi-Fi routers. Tomorrow, we’ll want 50 Mbps and soon 100 Mbps wireless connections.

iPhone Lifts All Boats

The demand for Wi-Fi networks is lifting the fortunes of many, including some with suspect business models. Take Martin Varsavsky’s FON for example. The company has been through some ups-and-downs, but now it has started to grow and is profitable: about €4.9 million ($6.83 million USD) in 2010.

Where is all the money coming from? Offloading of data from 3G to the Wi-Fi networks. For FON, the growth has come in the U.K. and in Japan. Nearly two million FON access routers with auto connectors to the Wi-Fi network are handed out to buyers of Android-based smartphones and the iPhones. In-Stat, a market research firm, recently predicted that by 2012, nearly half of the Wi-Fi connections from hot spots are going to come from handheld devices.

Martin said in an email that while the company is still making money selling Wi-Fi routers and Wi-Fi passes to travelers, the future growth for the company is going to come from other gadget makers who are going to auto-connect to the FON network for a year via Wi-Fi, then sell subscriptions. “For example certain multiplayer games will come with prepaid Wi-Fi access so people can play them everywhere,” says Varsavsky.

Five years ago, FON had no idea that this future would unfold, just as Biswas and Meraki had no idea the iPhone would one day be its savior. It started out as a company based on MIT’s Roofnet project, and its ambition was to sell its wireless mesh networking hardware to hotels and other establishments, particularly in non-western markets. It proved to be a tough proposition, to say the least.

In 2009, the company, which has raised over $40 million from the likes of Sequoia Capital and Google, went through a metamorphosis and shifted focus to the enterprise market. Being at the right place at the right time, the company has seen the total number of deployed networks hit 17,000 at the end of 2010. Its growth has followed the trajectory of the wireless LAN market; in 2010, WLAN sales were up 23 percent to $2.7 billion, according to Infonetics Research.

The Smartphone Boom and Network Effects

At my request to find out what devices were connecting to the networks, Meraki took a random selection of over 7 million devices (roughly a fifth of the total devices connecting to Meraki-based networks) and found the iPhone accounted for nearly a fourth of the total Wi-Fi connections.

In aggregate, Android, iPhone and iPad accounted for about 16.53 percent of the total connections in middle of March 2010. As of March 14, 2011, these three devices now account for about 33 percent of the total connections to network.

% (3/14/2010) % (9/14/2010) % (3/14/2011)
Total Devices 100.00% 100.00% 100.00%
iPhone 15.96% 21.88% 23.53%
Android 0.57% 1.30% 5.19%
iPad 0.00% 2.08% 3.41%

Why the growth? While laptops were used for wireless access, it’s difficult to walk around and use them as easily one can use a smartphone or an iPad. The smart devices encourage anywhere computing, which, in turn, puts a different load on the networks. Dominic Orr, CEO of Aruba Networks, put it best when he said, “The network model has shifted from hotspots to ubiquitous and uniform networks access.”

One of Meraki’s clients has data to show that. Westmont College, a liberal arts college campus in Santa Barbara, Calif., showed in a study that nearly 3137 distinct clients connected to the Meraki wireless network in February 2011, and about 10.12 terabytes of data wer transferred.

A year ago, the data transferred was about 5.06 TB and a total of 2458 distinct clients used the network in the month. Why? Because there was a sharp increase in the number of iPhones, iPod touches and yes, there were a few iPads too.

Where Do We Go From Here?

Biswas, who has been involved with Wi-Fi for a long time, believes a future version of Wi-Fi (IEEE 802.11 ac) is going to become an apt replacement for the gigabit Ethernet wired connections in a couple of years. Currently under development, we’re likely to see the earliest devices show up in late 2012.

But one thing he knows for sure: Wi-Fi is going to be the default network connection in our homes. Today, we might sit on the couch and be amazed at the novelty of FaceTime on an iPad, but in a few years, it will be as normal as life with Facebook.

With more devices connecting to this network, it’s only a matter of time before we see even faster wireless connections inside our homes.

This is good news for developers and innovators, who don’t have to wait for the carrier’s wireless infrastructure to catch up to their ingenuity. What are you waiting for? Time to get going!

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