Cellular communications and Wi-Fi networks were at one time bitter foes. Recently, the hostility has abated and rather than competitive alternatives, the two are viewed as complimentary services. Increasingly, handset vendors have been outfitting their high-end phones with Wi-Fi radios. As a result, power users gain more communications flexibility and better performance, but only if they have the right carrier and the right type of application.
Dual-mode phones contain a cellular radio (GSM/HSPA or CDMA/EV-DO) and an IEEE 802.11 Wi-Fi radio, which enables users to work with either a cellular connection or a Wi-Fi router that is usually connected to a broadband link. However, the additional functionality comes at a price: a Wi-Fi radio and adapter adds at least $20 (or more depending on the type of network supported) to the cost of the phone.
As a result, cell phone vendors have been selective in offering this feature to customers. “Support for Wi-Fi access is becoming a common feature on smartphones,” noted Dan Shey, Practice Director, Enterprise, at market research firm ABI Research. For instance, Palm has included Wi-Fi features on all of its smartphones, starting with the Treo Pro in 2008. Since the list prices for these phones often fall in $400 to $600 price range, vendors can cost justify the additional expense.
To date, that has not been the case with low-cost phones. However, component pricing for the Wi-Fi capabilities has been dropping, so this connectivity feature is expected to become more common as the market evolves.
Variations on a Theme
What may remain distinct is the type of Wi-Fi network supported. There are three variations of Wi-Fi that deliver varying levels of bandwidth, starting at 11 Mbps. The newest version is 802.11n, which operates at 100 Mbps; however, only recently have vendors begun shipping systems that support that high speed option. It is one of the features touted in the Apple iPhone 4G, Motorola’s Droid X, and Acer Stream. 802.11n support may remain a feature found in smartphones while other devices may gain lower speed, lower cost Wi-Fi alternatives.
The next area where the networking capabilities can vary is carriers’ Wi-Fi support. To date, service providers have been incorporating this Wireless Network option into their networks in a scattershot manner: some have forged ahead with wide scale deployments and others offers only limited functionality.
Verizon has been lagging the pack. The company has 17 phones, including the Palm Pre Plus and Blackberry Curve, available with Wi-Fi capabilities but the carrier has shied away from building out its own hotspot network or widely touting its phones’ Wi-Fi capabilities.
T-Mobile has taken a different approach and been very aggressive. While competitors were concerned that moving calls from their cellular network to Wi-Fi networks would decrease their revenue, the service provider viewed it as a potential differentiator. Worldwide, the carrier operates 45,000 hot spots, with 10,000 here in the US. The company started off supporting Nokia and Samsung dual mode phones and eventually added Research in Motion’s BlackBerry Storm and Bold, and Google Android devices, such as HTC’s HD2 and Motorola’s CLIQ, to its service portfolio.
AT&T has also moved aggressively in this space. In November 2008, the service provide purchased Wayport, a Wi-Fi hotspot and back office supplier, for $275 million. Since that time, the carrier has been weaving Wayport’s 20,000 hotspots into its cellular network. In fact, AT&T smartphones support automatic authentication at the firm’s AT&T Wi-Fi hotspots, so users can switch from one Wireless Network to the other without having to go through a series of prompts. Individuals with Apple, HTC, LG, and Samsung phones can access AT&T’s Wi-Fi service.
The automatic authentication feature is important because security has been an ongoing concern with Wi-Fi connections. Sometimes, they included limited (in some public hotspots virtually no) security checks. Consequently, individuals’ personal identifiers (password, user ID) could be transmitted in the open air. To enhance security, vendors have layered security checks, such as IPSec, on top of these connections. As a link switches from a cellular to a Wi-Fi connections, such features may be turned off, and users’ personal data is once again vulnerable.
Once a user has purchased a Wi-Fi phone and finds a suitable carrier and strong security functions, what are a few practical applications of the technology? “The most obvious benefit of dual mode phones is improved coverage,” noted Ross Rubin, executive director of industry analysis for NPD Group. If a cell carrier does not reach a certain area, a Wi-Fi hotspot can serve as an alternative. Also in locations, such as large office buildings, cell coverage may not be spotty, so hopping onto the Wi-Fi network enables users to complete their transmissions. In addition, if users travel overseas, they can remain connected to their coworkers, friends, and family via hotspots.
Vendors have been touting potential cost savings. “If individuals have usage based cell calling plans, they pay extra after a certain number of cellular minutes have piled up,” note Craig Mathias, a principal with Farpoint Group, a wireless communications consulting firm. Typically, calls place over Wi-Fi networks do not count toward this total. However, the potential savings can be difficult to pinpoint because the plans are often complicated and the additional costs fluctuate depending on how minutes are used.
More bandwidth for data intensive applications may be the most germane feature for users. Increasingly, individuals are working with video files. While 3G networks typically offer about 1 Mbps of bandwidth, Wi-Fi connections offer much more. Therefore, they can be better able to support applications, such as streaming video or video conferencing, which are becoming more common. For instance, the Apple 4G offers FaceTime, the company’s new video calling software which works only over Wi-Fi connections.
In addition, the recent emphasis on video content is having a ripple effect on how cell phones are used. Increasingly, they are being integrated with devices, such as PCs, TVs, and entertainment systems, which have also been gaining their own Wi-Fi functionality. A user may download a video onto the cell phones and upload it to a TV for viewing. However, these different products have distinct architectural foundations, so moving information from one to another can be a problem.
A vendor consortium, the Digital Living Network Association, which has 245 members, had been trying to address this issue. The group developed a set of interoperability guidelines so various devices can more easily share information. Handset suppliers have been gradually adding such functionality to their devices, for instance Motorola’s Droid X and Samsung’s Galaxy S support the standard.
Handset vendors have been touting dual mode features for a few years, but few users have been realizing any benefits. As the underlying infrastructure has been put in place, its impact has been growing. In April, T-Mobile said it was logging 40 million Wi-Fi calls per month on its network. In the first quarter of 2010, AT&T customers made 53.1 million Wi-Fi connections, which is nearly five times the 10.7 million connections made in the first quarter last year and already more than half of the 85.5 million total Wi-Fi connections made in 2009.
The rivalry between cellular and Wi-Fi networks has been abating. With dual mode phones becoming more common and carriers adding Wi-Fi support to their networks, this feature is beginning to deliver tangible benefits to customers.