Will WiFi Phones Eat Into Cellular Market Share?

 Some WiFi hot spot companies are banking on the fact that many mobile customers use their wireless service mostly within a 100 mile radius of their homes, and don’t care about roaming or country-wide service. VoIP over WiFi is less expensive, and suits the needs of these customers well. 

There are many WiFi phones on the market now – most notably by Linksys and UTStarcom. Some are dual band phones, meaning they operate both over WiFi and the cellular network – switching to a WiFi hot spot when one is available and saving their owners valuable airtime minutes.  Starbucks has become mecca for early adopters using WiFi phones to make less expensive calls.  Asian ODMs such as Accton have focused on this emerging market now for years, and have many ready-made designs available for license and private branding. 

The biggest issue these phones have traditionally faced is battery life and talk time – but Marvell has a new chipset that provides much more of both talk time and standby time – over 5 hours talk time and over 80 hours standby time. New generations of phones are in the works that will take advantage of this chipset – such as the one by ipDialog, Inc in Sunnyvale, CA.   Motorola was ahead of the game by announcing a nice clamshell phone in 2004, and we expect many more traditional phone OEMS to enter this market in the coming months. 

With better battery life, we bet this technology will take off – but dual mode phones will still require a traditional mobile service provider.  With the expansion of hot spots, traditional cellular carriers will definitely lose air time revenue unless they add new lucrative services to their bag of tricks - or move into mobile WiFi.

Photos of the Linksys WIP300 and WIP330 Courtesy of IdealGadget