In Praise of Pocketspots
Why are we so bullish on what we call Pocketspots, both for Clearwire LLC (Nasdaq: CLWR)'s WiMax network as well as for Verizon's coming LTE services? Because as these networks get off the ground, it's clear that portability, not mobility, of a wireless broadband service is going to be the most attractive feature, alongside the share-my-hotspot functionality that keeps older devices from becoming obsolete by making use of their built-in WiFi connectivity.
As we wait for developers to bring forth the expected mobile revolution -- one where wireless chips are embedded into every car, camera, refrigerator, and anything else with electricity -- for the next few years at least we're going to have to be satisfied with faster modems to facilitate our growing demand for mobile connectivity. And while we still don't know two critical components of Verizon's LTE services -- namely, the price and the associated data download limits -- it's hard to imagine potential customers ponying up for new LTE devices and service plans if they are only beneficial for one digital device.
By the time Verizon's services become reality, Sprint and Clearwire will already have had several months lead time selling WiMax-enabled smartphones like Sprint's HTC Evo 4G, which has a portable WiFi router built in to provide broadband to as many as eight other devices. Especially when it's linked to one of the true "unlimited" 4G service plans, pocketspots like the Sprint Overdrive or the one inside an Evo 4G are a compelling offer that Verizon might find hard to beat with a pricey, data-capped LTE service that only works with a laptop or a stationary modem.
But if Verizon makes that new LTE service available in a small, portable device (like the 3G MiFi that Verizon now sells) and removes the data limits, you now have something that allows you to keep using any current WiFi-enabled smartphone either from Verizon or from another provider until LTE phones really start to appear in late 2011 or 2012. Whether or not Verizon gets the iPhone this year, by introducing an LTE pocketspot it can go after the huge iPhone installed base with the strategy that Sprint and Clearwire are trying right now.
— Paul Kapustka is the founder and editor of Sidecut Reports, a Wireless analysis site and research service. He can be reached at [email protected]. Special to Light Reading Mobile.