Why Don't We Talk About Hot Spots Anymore

We certainly talked a lot about Wi-Fi Hotspots through the years. But the amount of ink spent on the topic has diminished since the heady years around 2002-2004. In some senses, that’s the way it goes. Back then, debates raged about the business models, “a” vs. “g”, who would own the market. But largely, those debates have been cooled to a simmer.

HotSpots just didn’t pan out in a way that some thought they would – as a major threat to cellular carriers and 3G. The backhaul costs, operational/billing costs, and limited footprint of Wi-Fi saw to that. So now we’re debating FMC and Muni-mesh instead, and we’ll have to wait to see how that goes. But even as Wi-Fi Hotspots didn’t “kill” 3G and set the world on fire, they are steadily being deployed and used by an increasing number of laptop-toters armed with Wi-Fi chips (and an increasing number of non-laptop devices, too), according to a recent report from ABI Research.

ABI says there will be 143,700 Hotspots by the end of this year, for a 47% increase over last year; and the EU is home to 57k of them while the US posts 49k. ABI notes that a recent resurgence in Hotspot deployment is linked to the boom in the model of retail establishments offering it to drive their main retail business, such as McDonald’s Restaurants. Back in 2002, who would have guessed?

Meanwhile, it’s interesting to look back to this InStat forecast of 2002, where they predicted 42,000 Hotspots worldwide by 2006. Of course, at that time, the concept of a Hotspot was: an expensive device with a T1 line and a billing relationship. At the time, Techdirt writer Prashant Aggarwal even thought 42k was optimistic, unless a new business model was identified and implemented.

What does the resurgence of Hotspots mean to us? Well, the growing number of free-ish Hotspots will mean that a lot of the ideas that didn’t quite pan out in the first Hotspot boom may find new life. The availability of Wi-Fi chips with lower power consumption will also contribute. The concept of a (consumer) FMC phone that can lower costs by roaming to a Hotspot make sense when Hotspots cover more area, and when logging-on is simple and free. Other consumer devices like handheld Gaming (the Mylo), cameras, etc, all start to make more sense for Wi-Fi when Hotspot availability grows and prices drop. So dig into the file cabinet and pull out some of those failed business plans. In a world where it doesn’t cost $15 to log into a Hotspot, lots of things are possible.

Notes: the FMC phone for enterprises makes sense regardless of Hotspots. There remains the problem of login and settings, in that if it's difficult or complicated (even if free) it is a barrier to the mass market.

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