The iPhone as Barometer

I suspect two upcoming mobile launches will be the talk of the town at the NXTcomm show in Chicago next week.

One will be T-Mobile US Inc. 's rollout of the first nationwide cellular and WiFi fixed mobile convergence service. It is expected to go live "in a couple of weeks" and I've heard there may be an announcement on June 26th.

The other will -- naturally -- be the debut of the iPhone on June 29th. Apple Inc. (Nasdaq: AAPL) and AT&T Inc. (NYSE: T) have been pretty damn cagey about showing off this most-hyped of gadgets so far, but it's possible we'll get a few more glimpses at the show. You can bet your eye teeth that a number of breathless "Shadow of the iPhone Looms Large Over Show" style think pieces will also be written. [Ed note: Not at all like this one, then, eh Dan?]

Both are going to be interesting indicators of how well wireless LAN is going to go with cellular users in the U.S. As I've said before, most American carriers are leery of WiFi because it could potentially offer users a way to make free calls, eating right into operator's voice cash cow.

T-Mobile's Hotspot@Home service avoids that issue by using the unlicensed mobile access technology (UMA) to handle the call transfers between the two networks. It has some clever tech mojo that allows the operator to keep control of the call session. It will still, however, be interesting to see if T-Mobile charges less for the WiFi calls or if users come up with any clever workarounds (I suspect the industry will call them "hacks") to allow free calls.

T-Mobile has been testing Hotspot@Home in Seattle for a while now and must be reasonably confident of the service to push it nationwide. I don't expect that it will be an overnight success, however, since cellular users typically take time to warm to new features -- see 3G, mobile Internet, etc., etc. -- and there won't be a huge amount of suitable handsets available at launch.

Nonetheless, if T-Mobile gets reasonable take-up within six months to a year, I anticipate that other carriers will start to reconsider long-term IMS plans and jump on readily available UMA technology. Of course, I'm not quite sure what reasonable take-up actually means yet. Let's hope more successful than its parent company's dabblings with FMC. (See DT Cancels FMC Service.)

If Hotspot takes off it will likely start to make WiFi on U.S. phones more of a standard feature than a rarity. Even if it is not this service, something will happen soon to bring WiFi to the huddled masses of cellular subscribers.

That 'something' might just be the iPhone if it lives up to expectations. WiFi isn't really a selling point for the iPhone, it's just part of the feature set. It proves, however, that if a phone is hot enough then even carriers will accept the inclusion of WiFi. AT&T/Cingular, you may recall, actually had the WiFi capabilities removed from its version of the Nokia E62 phone.WiFi may not even seem that important yet to the potential iPhone user. If Apple opens up the development environment for the device as much it claims, however, you can bet a clever geek or two will find a way to swap between WiFi and cellular.

Of course, it remains to be seen if the $500 iPhone will be the Trojan horse that brings WiFi into the carrier's walled garden. It’s a pretty expensive battering ram. But even if it is not, then the forthcoming BlackBerry or something as yet unknown will be. Eventually U.S. carriers and users are going to learn to live with WiFi.

— Dan Jones, Site Editor, Unstrung