August 5, 2004 4:00 AM PDT

Wi-Fi phones make a splash

Cell phone makers plan to release so-called Wi-Fi phones ahead of schedule, bringing new threats and opportunities to wireless carriers and traditional phone service providers.

The highly anticipated hybrid phones let people make connections using a local wireless Internet access point and seamlessly switch over to a cell phone network whenever necessary. The net result is greater flexibility in mobile communications as well as potential cost savings gained by shifting call minutes that would otherwise count against a cell phone plan onto the Internet.

New phones and handsets that promise to accomplish this feat are due later this year from Motorola, Hewlett-Packard and NEC. Each is different, but all combine into a single device three hot technologies that are transforming the telecommunications industry: high-speed Wi-Fi wireless networks, voice over Internet Protocol (VoIP) and wireless broadband.

"If you go into any major carrier in North America or Europe today, they are at the very least in the strategic planning phases of integrating Wi-Fi and cellular into a package," said Novatel Wireless Vice President Brad Weinert. "What's holding them back is the infrastructure to manage this on a large scale. But the operators are certainly driving in this direction quickly."

The marriage of short-range, high-speed Net access and cellular service brings together two technologies that have sprung up side by side, creating opportunities for both collaboration and competition. Cellular carriers have spent billions of dollars to upgrade their systems for high-speed data, or third-generation (3G), services. These offer wide coverage that exceeds Wi-Fi's short range, but bandwidth tops out at less than 500kbps (kilobits per second), and thus can't compare with wireless LAN (local area network) technology that blazes at speeds up to 54mbps (megabits per second).

Combining the ability to use both kinds of networks on a single device allows consumers to take advantage of the best each has to offer.

News.context

What's new:
Roaming between wireless Internet access points and cellular services may be closer, as cell phone makers plan to release Wi-Fi phones ahead of schedule.

Bottom line:
Some see the highly anticipated hybrid devices as an opportunity to cement the cell phone as a replacement for traditional wired phone service. But the high price of the handsets means they could be out of reach for the average consumer--for now.

More stories on this topic

Hybrid handsets can use both data and voice applications, with most of the attention focused on data until recently. But that's changing, thanks to technology improvements for managing call transfers between Wi-Fi and cell phone networks and the increasing popularity of VoIP on corporate networks.

Early versions of Wi-Fi cell phones failed miserably because of the enormous drain on the batteries--which must support two chipsets rather than one--and because users were forced to manually switch between networks. But at least one phone maker, Motorola, now claims to have solved the automatic transfer problem. As a result, carriers are promising some dizzying scenarios by Christmas. For instance, a customer could start a call on an office Wi-Fi network, switch to a cell phone network as he or she travels outside the office building, then conclude the call on a home wireless network, all with no interruptions.

T-Mobile USA plans to offer a hybrid phone developed by HP, designed to allow someone to use a phone to carry on the same conversation while traveling on the highway or sitting in an office cubicle. Meanwhile, Sprint may soon opt to distribute one of the phones. The company has already had some success selling a more cumbersome service that doesn't automatically toggle and which was created primarily for data transfer rather than voice sessions.

AT&T Wireless, Verizon Wireless and Sprint are also likely candidates. They are reselling access to a 3,300 hot-spot wide network owned and operated by Wayport. The hot-spot company two years ago signed roaming agreements with cell phone service providers "just in anticipation" of the debut of cell phones with Wi-Fi radios inside, said Wayport Vice President Dan Lowden.

Although carriers could wind up losing some revenue if Wi-Fi users shift a large number of minutes off their networks, some see the new phones as an opportunity to cement the cell phone as a true replacement for traditional wired phone service.

"I see an opportunity to attack the regional Bell operating companies," said Barry West, chief technology officer at Nextel Communications and an early fan of such hybrid phones.

The handoff
Motorola, in cooperation with Proxim and Avaya, has developed one of the most significant of the new hybrid phones. The phone, unlike those from competitors, switches automatically between cellular and wireless Internet networks.

While careful not to give up too many trade secrets, Chris White, Motorola's director of business development, said network software helps the cell phone sense when it's about to reach the end of Wi-Fi coverage. While the call is still traveling through the Wi-Fi network, the phone will register onto a cellular network, in essence creating a second phone line for the call.

The phone has been in the works since last year, when Motorola struck a deal to use chips from Texas Instruments designed for the purpose.

When the Wi-Fi signal degrades to a preset level, the call is bridged onto the cell connection through means that Motorola declined to discuss in detail.

The only thing a consumer will notice is the change in the quality of the caller's voice--for the better if the phone is switching to a Wi-Fi network and for the worse if it's hopping onto the cell phone network.

"What's happening here is we're setting up two different IP addresses for the same call, and that's something that's never been done before," White said.

Pocketbook panic
The handsets will be expensive and marketed primarily toward business customers, at least for now.

For instance, HP's 6315 iPaq, which switches between traditional cellular and Wi-Fi networks, costs $500, and that's with a $100 discount for signing a one-year contract with T-Mobile. The carrier will begin selling the device around Aug. 26.

That price is likely to be too high for most cell phone users, who are used to paying less than $50 for a color camera phone that might cost carriers $300.

Plus, wireless broadband would cost consumers between $40 and $80 a month, and unlimited access to a nationwide Wi-Fi hot-spot network would add another $20 to $40 a month.

"There are a lot of cost barriers," a Sprint representative said. "There aren't a lot of customers willing to pay what a carrier will be charging for things like an automatic handoff between networks."

Motorola has said its new hybrid phone will be used primarily by businesses. The handset maker chose to use the 802.11a Wi-Fi standard, which is found almost exclusively in offices, rather than the more widely used 802.11b or 802.11g standards.

"These phones are not in the consumer end of the business," Motorola's White said.

It could take up to two years before carriers focus their Wi-Fi phone efforts toward consumers, some experts believe.

"Most carriers haven't evolved the business model for consumers," said Mack Weatherby, marketing alliances director at Avaya. "But there will be more carriers selling to consumers."

29 comments

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Who cares? Where's the Web?
I'm supposed to pay $500 bucks for a new handset and pay an extra $20, $40, or $80 per month just so my voice calls can get routed "seamlessly" around various networks? My handset works OK for voice already. I was hoping that 3G and Wi-Fi would let me access the Web anywhere -- not the pathetic little bits you get on PDA-phones, but the actual Web -- without having to lug a notebook computer everywhere. Seems that the real limitations are in device designs, not the networks.
Posted by (1 comment )
Reply Link Flag
Good investment
I have a Consulting company and will be moving in a new building in 5 months. The new WiFi phone will replace my PSTN or/and VOIP phone, and/or Cellular phone and/or home phone. As one of the owner, I am very happy to save money on cabling, equipment and devices such as the phones. Also we adding mobility which is extremely important inside the building and on the road as long distance bills adds up when you are away from the office. Having one number for the office, on the road and home is also a great benefit.

No I am not a reseller, I am a user.

Thanks,

Marc
Posted by (1 comment )
Link Flag
SWIFTER NET SURFING ON CELL PHONES
I want to replace my current cell phone with a smartphone with wifi. The poster is correct; I have no problem with voice calls; I am looking for a better internet connection similiar to the one you get on laptops.

Adding wifi to a smart phone would pretty much replace a laptop for me.
Posted by laslickchick (1 comment )
Link Flag
I Care
It's a great proposition, because you won't be using minutes when on WiFi.

mj
www.junglemungle.com
Posted by mj_junglemungle.com (25 comments )
Link Flag
It won't happen anytime soon, I think
Most cell phone carriers have deals for exclusive content delivered to your phone. Keeping the real internet off your phone allows them to make exclusive deals for content. If you could hop on the net and get some song, or news, or video yourself, then Verizon or whoever would lose out on some revenue stream.

The only way this will happen is if some smaller carrier recognizes that they'll get a ton of business by letting users surf the net without the $50/month addition fee. If this happens, we can vote with our dollars. Even if Verizon or whoever wants to give us free internet on our phones, we'd have to wait for current contracts to expire.

That's really my best guess on the subject.
Posted by bspence11 (8 comments )
Link Flag
If you're looking for a hi-end quality wi-fi cell phone for less than $200 and the service is only $24.99 a month and it includes all the features like internet, im, txt msg, pic msg unlimited calling, no long distance charge anywhere in the world, send me an email at Maricella@5linx.net The company I work for is about to launch this phone in early August you can check out our website at 5linx.com
Posted by Maricella37 (2 comments )
Link Flag
You accurately define the problem. It is really a matter of personal choice. They have reduced laptops to web books, but I would not use them to make a call. Perhaps HTC's Touch HD will fill the gap if ever arrives in the US.
Posted by bigbruce1 (2 comments )
Link Flag
802.11a?
"The handset maker chose to use the 802.11a Wi-Fi standard, which is found almost exclusively in offices, rather than the more widely used 802.11b or 802.11g standards."

C'mon... nobody uses 802.11a... not even business. While the statement is symantically correct, Motorola's selection of 802.11a will render the product useless.
Posted by (2 comments )
Reply Link Flag
WiFi vs "Carrier"...
In accord with both previous statements... if the product is successful, then why only target businesses? As a "carrier" dealer, i notice consumer demand shift toward integration of wifi into cellphones. I am waiting for a phone that will give me wireless access to the complete web. Voice data is covered by the carriers already, why create a conflict and eventually increase carrier rates? Some rates are already skyrocketed, an additional $20-$40 is not what consumers are looking forward to. Simple wifi capablity on cellphones would be the best initial step.
Posted by Emad H. (2 comments )
Reply Link Flag
Good Idea, if done correctly.
I am really wanting this service for my home. I aleady have a wireless home network, though on 802.11b/g but I'd be willing to get 802.11a if needed. Why? I happen to live in an almost dead spot for T-Mobile voice service. I have to stand on either side of my house, and not move to get phone calls sometimes. If I go 200 feet in any direction, great service. So, I'd want this just so that I can actually use my cell anywhere in my house, without worrying about dropping calls. Oh, and this is the same with any service provider, Cingular, Nextel/Sprint, etc. All my friends, with other providers have the same issues. Stupid house. hehe
Posted by stuffuser (5 comments )
Reply Link Flag
Please see my comment below, about T-Mobile WiFi cell hpne service.
Posted by sonhadorpr (4 comments )
Link Flag
wifi phones
Question?
if i have a portable router with lets say a USB or PC wireless card for internet access, from any company that sells these devises, will one of these wifi phones work no matter where i am at!
Posted by 69ruben (1 comment )
Reply Link Flag
Verizon Wireless Wifi
I have a Verizon Wireless XV6800 and do not plan to sign up for the data services. If I switch on to wifi, is it compared to turning on a wireless modem on your laptop, receiving internet signal? If I do receive internet signal via wifi, will verizon charge me for the MB received?
Posted by PBLGARCIA (1 comment )
Reply Link Flag
Did u ever get an answer about this, or find an answer somewhere else?
Posted by marcbeer (1 comment )
Link Flag
Wifi phone supports IEEE802.11b whose maximum transmitted rate is 11Mbps.In WiFi coverage,users with WiFi phones can fastly browser Internet pages,dial and receive calls at ease,you can enjoy pleasures brought by stream media and network games which are worthy
expecting,besides,you can also receive and send emails,download MP3 files,transfer digital
photos which are basing on fast net rate and low consumption costs.Although WiFi is prohibited in China,Sourcinggate.com can offer international customers diverse excellent
WiFi phones.Tips:Compared with bluetooth,WiFi has wider coverage and faster transferred
rate.
Posted by winstoncai (2 comments )
Reply Link Flag
For those of you who are interested in an affordable good quality wi-fi phone, my company is launching a wi-fi phone that is less than $200 dollars in August and the service will include not only unlimited calling and no long distance charge but also all the extra features like internet, pic msg, text msg, im, and everything else for $24.99 a month, Please contact me at Maricella@5linx.net for more info.
Posted by Maricella37 (2 comments )
Reply Link Flag
I use Version as my cell carrier can anyone tell me is there a phone that will access a wi-fi network for just internet surfing. I know the I-Phone will do it but does version have one that can at this point.
Posted by rmhoutz (1 comment )
Reply Link Flag
Well...I didn't see when this article came out.
As of October 2008, there are several models for T-Mobile users, (I use the Samsung SGH-T339) which do not require a subscription to a data plan or wifi plan, all you do is go to your local McDonald's, Border's, StarBucks, or even use your home Netgear or Linksys WiFi router, and whamo!!
You can connect to the Internet AND make Long distance calls, over WiFi, without paying extra; and without using your regular day minutes.

For example.
I pay 29.99 for 400 Anytime Minutes.
I have Free Night (Starting at 9pm) and Free Weekeneds.
If I happen to have to make a call, and I am worried about my minutes running out, I switch to WiFi, and make the calls.
Now. I am not an expert on the mater, and I happen to notice the technology needs much improvement.
My model has to be very close to the WiFi router, in order to get a good signal.
I have it in my mom's room, and I get 2-3 bars in my room, which is right next door, in contrast to my laptop, where I can go all the way outside to the front sidewalk, and still get a good signal(from my mom's room, all the way in the back of the house)...I guess a good 40 ft.

But...like I said, for the price (I got the phone for free, with a 2 year agreement/subscription to T-Mobile) I can make unlimited calls, as long as I am near a WiFi router, otherwise, I have 400 minutes to use; all for 29.99/Mo.
I think its great!!!!
Posted by sonhadorpr (4 comments )
Reply Link Flag
As of Saturday October 4, 2008, the T-Mobile WiFi Cell Phone models are:
Nokia 6301, T-Mobile BlackBerry® Pearl? 8120, T-Mobile BlackBerry® Pearl? Flip 8220, T-Mobile BlackBerry® Curve? - Titanium, T-Mobile BlackBerry® Curve? - Sunset, T-Mobile BlackBerry® 8820, Samsung Katalyst, Samsung T409, & Samsung SGH-T339

http://www.t-mobile.com/templates/ListAllPhones.aspx/?features=4ce9c948-6b53-4b76-a3f7-9116f33bd25b&WT.mc_n=TMHSDevice_WiFiLP&WT.mc_t=Offsite
Posted by sonhadorpr (4 comments )
Reply Link Flag
iPhone provides the cabapility that the first poster raised - be able to use the current cell phone to make calls, but connect to the internet via wifi. Only problem is iPhone requires subscription to data plan. If another phone provides similar capability where data plan is not required, it would be quite a hit.
Posted by reach.explorer (1 comment )
Reply Link Flag
I see a lot of similarities between today's communication companies and the oil companies. They are totally committed to maximizing profits. They could care less about what is best for their customers. Unfortunately, our government has been a co-conspiritor for many years. I am hopeful that things will change soon.

The overpriced data plans that the various wireless companies are pushing are the cash cows of their business. Even though the masses want phones which offer unrestricted wifi access, the wireless companies know that if they offer this kind of product, they will take a big revenue hit when users who only need to check email or browse the web occasionally drop the $40 a month data plan in favor of logigng on to the Internet at a hotspot every now and then.

I pay for phone and Internet service at home. I pay for the convenience of a cell phone when I am not at home. I do not want to pay extra to access the Internet , that I am already paying for, when I am on the road. The greedy telecommunications industry has been gouging us for years, and I am fed up. It is an industry, not unlike the auto industry, that we cannot do without. Unfortunately, also just like the auto intdustry, this industry has made so many stupid decisions over the years that they are crying out for Government regulation.

The communication companies have to provide the services that our society needs and wants. I think that everyone would agree that they should make a reasonable profit for providing these services. Unfortunately the words "reasonable" and "profit" do not often appear very close to one another when this subject is discussed. These companies have been gouging us forever and the problem seems to be getting worse rather than better.

I think that it is time for consumers to rebel against the overpriced, limited options that are currently offered by the wireless communications companies. We should boycot their "data plans" and demand that they offer hardware that allows unrestricted access, via wifi, to the Internet and all its capabilities.
Posted by dsafety (3 comments )
Reply Link Flag
Skype has the Wi Fi phone "Belkin" under $200 that puts these Top Dog ISP's to shame because No big phone bills, No contracts., Just pay as you go or $ 3.99 a month anywhere in US & Canada anytime. PC to PC Free! VOIP
What A Bargain!
Sign up on your PC today!
You do need a PC to use eighter and already I made an overseas call.
I'm glad I did not renew my contract with VERIZON who who has so many sur charges is the reason I want out of "The Network " Can you hear me now Verizon?
Posted by homey4u (12 comments )
Reply Link Flag
Skype.com is mobile with Wi Fi to talk to any land line or cell phone in USA or Canada for only $ 2.95 a month with no contracts. If you use your Skype Belkin to Skype Belkin your talk is FREE anywhere in the world !
Posted by homey4u (12 comments )
Reply Link Flag
Sometimes i wonder its exploitation from wireless carriers to charge us so much for such a lousy service
If they give a little better service they will behave like kings...[verizon] otherwise a like t-mobile. i am fed up of feeding these bloodsuckin wireless mobile companies for lousy service that they provide, I wish govt should intervene make some basic rules for these theives
Posted by GodWish (79 comments )
Reply Link Flag
Ben states a speed number of 54mbps (or 54 mega bits per second.) while this is true for the actual wifi connection from the phone to the router, the actual internet (from the router to the world) is limited to 10mbps.

Unless the internet connection is using a T1 line (I am sure most Starbucks, McDonalds and 99% of hotspots don't.) the 54mbps is unrealistic.

In general, with the overhead of the packets and all, the transfer rate of any usable data is more like 1mbps. Then add in only one other user (your buddy on his cell phone using the same connection,) and the transfer rate is 1/2 that. Have 10 customers on phones...? You can see how quickly the performance degrades.

Don't get me wrong here, the idea is one of the best things to happen since sliced bread, but don't expect hi res videos in a crowded cafe any time soon.

Mark.
Posted by markie53 (1 comment )
Reply Link Flag
So much has changed in WiFi phones over the years. I just bought a WP04 from http://www.yippz.com which works with 4 SIP providers. Sound is great, and under $130 bucks works for me.

They also sell the SC-6060S WiFi phone which has a built-in micro browser and 10 IP Surveillance settings, if you have IP cameras. It's more expensive but does do much more.

With WiFi everywhere these days, I've been able to ditch my cell phone for 90% of my usage and use my WiFi phone. Amazing.
Posted by Killer1414 (1 comment )
Reply Link Flag
 

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