Uncommon Wisdom

Nov 11 2010   12:47PM GMT

Verizon’s iPad approach bundles mobile WiFi hub

Tom Nolle Tom Nolle Profile: Tom Nolle

Verizon has started to advertise its iPad deal, and it’s a bit more complicated than the rumors had suggested. What the big telco is doing is bundling an iPad with a mobile WiFi hub, a gadget that links to a 3G service and then creates a mini-hotspot to which WiFi devices can then attach. This finesses the exclusivity AT&T has for the original iPad, and it’s similar to strategies used by other carriers to end-run Apple’s restrictions.

What makes the deal confusing or complicated is that the data plan that comes with the iPad bundle has a much smaller charge for incremental gigabytes over the base plan than other mobile broadband plans from Verizon. Most pundits expect that Verizon will be normalizing the pricing over time, but it’s also possible that Verizon intends to promote the use of wireless trans-connectors to link smart WiFi devices to 3G/4G networks instead of relying on specific 3G/4G receivers. Such a move would have some interesting consequences.

  • First, it would promote customers’ use of multiple devices through a single data connection and on a single data plan. We’re told that many of Verizon’s iPad prospects are also laptop users and that many also have smartphones. You can see the value down the line in having one 3G/4G device and a set of WiFi slaves.
  • Second, the trans-connect model would facilitate 3G/4G offload with WiFi and provide in-home use of smart devices using the existing home wireless network, rather than perhaps requiring femtocell deployment.  This could be especially valuable if Verizon intends to offer special services to FiOS customers, who already have FiOS-linked wireless hubs in home.
  • Third, the model could reduce the issues associated with migrating smart devices to 4G by making it necessary only to migrate the trans-connect hub and not the devices. It’s also probably easier to make a high-quality 3G/4G/WiFi hub than to stick all those RFs into one phone or tablet.

All of this makes sense for non-phone devices, but if Verizon were really serious about the hub approach, it would also be logical to think about releasing a hub-linked smartphone. That would also play into rumored plans for a WiFi-based, FiOS-linked VoIP service that have been floating around.

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