Wi-Fi-enabled phones to double in numbers

This data shows how, driven by increasing consumer awareness and demand, new operator business models, and increased value for handset manufacturers, Wi-Fi technology will continue to penetrate deeper into mobile handsets over the next five years.

"This past year there has been an explosion of Wi-Fi capable phones," Michael Morgan, industry analyst, commented. "Due to operator and customer demand, and handset manufacturers trying to deliver more product value, Wi-Fi is quickly becoming 'table stakes' for smart phones."

The user's experience appears to be critical in handset Wi-Fi adoption. While Nokia leads the market in Wi-Fi-enabled handsets due to the sheer volume of its portfolio, Wi-Fi models only represent a small fraction of the range. In contrast, every Apple iPhone has Wi-Fi, and due to its ease-of-use and the seamless iTunes experience, more iPhone users—as many as 75 percent—are using their Wi-Fi regularly. Contrasting again, HTC's handset lineup is 80 percent Wi-Fi-equipped, but only 10 percent of its users are employing the Wi-Fi capability.

Hurdles
Despite the rosy outlook, Morgan cautions, there are challenges to Wi-Fi's growth. "One obstacle is the glacial pace of IEEE standardization in the areas that address voice over Wi-Fi usage.

Another is the growing carrier interest in femtocells. While they have their problems, femtocells do provide an alternative to improving in-building coverage without the need for Wi-Fi-capable handsets. Although Wi-Fi access points are already installed in many homes and business, the carriers may ultimately push to have femtocells installed at these key locations.

In Wi-Fi's favor: As flat rate data plans increase, wireless operators can leverage Wi-Fi capable handsets to offload data intensive applications, improve in-building coverage and offer new services to new markets.