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Is MiFi the future of wireless internet -- or a fad?

Mark Milian
AT&T unveiled its first MiFi gadget on Wednesday, joining Verizon Wireless and Sprint.
AT&T unveiled its first MiFi gadget on Wednesday, joining Verizon Wireless and Sprint.
STORY HIGHLIGHTS
  • MiFis are small mobile devices that provide a Wi-Fi signal to computers or iPods nearby
  • AT&T introduced its first MiFi device on Wednesday, following Sprint Nextel and Verizon
  • But MiFis are believed by many to be a passing fad
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San Francisco, California (CNN) -- Two prevailing theories for how we will access the internet in the future hinge on the success of small plastic gadgets called MiFis.

The devices, many of them smaller than a smartphone, are similar to the wireless routers in many homes except they don't need to be plugged into anything.

They connect to a cellular carrier's data network. Once the battery is charged, a MiFi can be taken anywhere, and it provides a Wi-Fi signal to computers or iPods in a nearby vicinity.

In one of those future scenarios, each family would have their own one of these gadgets.

This can be more economical than subscribing to separate data plans for each cell phone and tablet you buy. Some families have found this especially effective for staying connected on road trips or in hotels that don't offer free Wi-Fi.

AT&T introduced its first MiFi device on Wednesday. Sprint Nextel, which already has the 4G-enabled Overdrive, started selling a thinner gadget called the ZTE Peel last week. Verizon Wireless offers the popular MiFi 2200 Intelligent Mobile Hotspot and another equipped for international travel.

These products generally cost $50 to $150 (some require a two-year contract) and $35 to $60 per month for the service, depending on the carrier and amount of data you use. Virgin Mobile also has an unlimited plan for $40 with no contract.

T-Mobile USA, the only of the major wireless carriers not to offer a MiFi device, is considering releasing one next year when it expands and updates its network, Neville Ray, the company's chief technology officer, told CNN recently. Current third-generation technology hasn't been fast enough to serve this growing breed of products, he said.

But telecoms are rapidly improving the speeds of their networks with fourth-generation technology. So MiFi could eventually replace wired broadband subscriptions in the same way that Americans are canceling home phone lines in favor of cell phones. (That depends on whether the U.S. government solves an industry threat relating to wireless spectrum availability.)

Telecoms have been hot and cold about which connectivity methods to promote. Should they focus on MiFi as a gadget to connect everything, or on having a 3G chip in each device? Or maybe even on high-end smartphones that have the MiFi functionality built in (an additional fee is required)?

Not long after Apple's iPad debuted in April, Sprint shrewdly began promoting the Overdrive with a case designed to fit the tablet and the MiFi. After selling out of initial stock, the telecom didn't renew the program.

"It achieved its purpose at the time, which was to raise awareness that you can put these two devices together," said Teresa Kellett, Sprint's director of 4G.

When Verizon announced that it would begin carrying the iPad, it bundled the Wi-Fi version of the tablet with a MiFi, rather than selling an iPad with a 3G chip built in, like AT&T does.

Jon von Tetzchner, the co-founder of the Opera browser, endorses the MiFi concept. Not only is it cheaper, but it can be more efficient having one gizmo talk to cell towers and satellites and then distribute that signal to Wi-Fi-enabled appliances in the house, he said.

"In the next 10 years, every device will have an internet connection," Tetzchner said recently.

On the other side of the debate, MiFis are believed by many to be a passing fad. Once every device can have a cellular chip in it, why would we need an extra gadget to carry around?

Telecoms are pushing this concept of "machine-to-machine," which means adding cell chips to refrigerators, stoves and other appliances that you wouldn't normally expect to connect to the Web. Some say this is the future of internet connectivity.

Dan Deeney, a partner at technology investment firm New Venture Partners, doesn't see a long-term future for the MiFi.

"I think there will be a role for them going forward, but I don't think it'll go mainstream," said Deeney, who works closely with Verizon. "Right now it's a matter of costs. Wi-Fi chips are cheap."

Once the price of cell chips comes down, he says connected machines will become more ubiquitous. In that scenario, each gadget will manage its own connection and won't need to rely on the limited battery life of one MiFi device.

Whichever the outcome, technologists agree that we'll be seeing internet functionality embedded in a lot more products than we have now.

[TECH: NEWSPULSE]

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