Novatel turns individuals into walking hotspots

Novatel Wireless (NASDAQ: NVTL) today added Sprint (NYSE: S) to its customer roster, one week after also signing up Verizon Wireless (NYSE: VZ). Its MiFi 2200, an intelligent mobile hotspot, essentially turns an individual into their own walking hotspot. Rather than have to seek out a Starbucks, business center or other Wi-Fi hotspot, subscribers can simultaneously connect any number of personal devices and up to five users to the Internet by having their business-card sized MiFi within reach.

Similar to Clearwire (NASDAQ:CLWR)'s recently introduced Wi-Fi distribution service, the MiFi technology connects Wi-Fi enabled devices, including laptops, MP3 players, digital cameras and gaming devices, to Sprint or Verizon's 3G networks. For example, a multi-tasking college student with a MiFi in her backpack could listen to streaming radio on her MP3 player while accessing an assignment from the school's Intranet, uploading pictures from a Wi-Fi enabled digital camera and emailing her professor. Likewise, two business travelers sharing a cab could also share the signal to email while on the way to the airport.

The pocket-sized device integrates internal CDMA and Wi-Fi antennas with advanced security and authentication technologies. Much like a cell phone, the router also provides four hours of use and 40 hours of standby on a single charge. According to Sprint, Novatel's MiFi is the first of several innovative mobile broadband devices it will announce this year with future devices including 3G, 4G and dual-mode connectivity. 

Called Mobile Hotspot under Sprint, the service will also support MiFi's GPS capabilities, enabling location and mapping apps over Wi-Fi. This is the first app of many to come, according to Novatel CEO Peter Leparulo. With the launch of the MiFi platform, Novatel is planning to begin its first phase of a content delivery portal, a native application enabled by the intelligent server on board the MiFi, Leparulo said on the company's first-quarter earnings call last week. The portal will be a mash-up Web application where data and functionality from multiple sources can be integrated into a single app to deliver customized information to the end user.

"Ultimately, this service will provide personalized content, which provides us an opportunity to generate new revenue streams by selling mobile content to our carrier customers," Leparulo said on the call, according to Seeking Alpha's transcript. "We believe this is the beginning of a complete and dynamic end-to-end user experience. Other initiatives in this area are well underway."

The idea is that having this app-driven software environment will help Novatel fend off competitors that can mimic the MiFi device's connectivity capability, Leparulo said. Novatel also plans to deploy with several other tier-one carriers across the globe with the goal of establishing an installed base to deploy applications to before competitors get out the door with their own devices.