iPhone Not The Only New Kid On The Block

Larry Magid Reports On T-Mobile's Hybrid WiFi-Cellular Phone

(CBS)  For the past several days I've been testing a very innovative new cell phone. It uses WiFi along with a regular GSM cellular network, it has a camera and you can use it to browse the web.

No. It's not the Apple iPhone. It's one of T-Mobile's new "Hotspot at Home" phones that's designed to make calls either through T-Mobile's GSM cellular network or through the Internet from a wireless (WiFi) hotspot at your home, from work or at a public location such as a Starbucks coffee shop.

The Apple iPhone, which comes out on Friday, will also have WiFi access, but for data only. What makes these T-mobile phones unique is the ability to make calls over the Internet.

Because of the WiFi connection, the phones, which go on sale Wednesday, have two advantages over traditional cell phones.

One advantage is that you can use them in areas where there is spotty cellular coverage or no coverage at all, assuming you have wireless Internet access. The other advantage – depending which plan you get – is that when you're using the Internet to make phone calls, you're not burning up cell phone minutes.

Here's how it works. When you're out and about such as in the car or walking through a park, you can take and make calls on T-mobile's regular cellular network.

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Click here to hear Larry Magid's podcast
on the new hybrid WiFi-cellular phones.

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As with any cell phone call, the quality of the call depends on the strength of the signal. But when you're near a WiFi hotspot, the phone automatically tries to make a connection to the Internet. If it succeeds, all of your calls are placed using Voice Over Internet Protocal (VOIP), similar to Skype, Vonage and other VOIP phone systems. But when using this phone, all calls must be made through T-mobile's network. You can't use the phone with Skype or any other VOIP service.

One market for this phone is people who want to cut the cord by using only a cell phone at home instead of relying on a wired "landline."

A 2007 survey by the Centers for Disease Control and Prevention reported that 12.8% of American homes rely solely on a cell phone. When you consider people between 25 and 29, the percentage jumps to 29.1%. That number might be larger if it weren't for the fact that 30% of cell phone users, according to T-mobile report that "poor reception at home is the biggest barrier to landline replacement."

With this phone, people with WiFi at home can get great reception, regardless of the quality of their T-Mobile signal.

Another market for the phone could be college students and others who spend a great deal of time around WiFi hotspots. My son Will, who attends UCLA, has been itching for a WiFi phone. Like a lot of colleges, all of UCLA is covered by a WiFi hotspot. If he had this phone, he could use it from anywhere on campus without having to rack up cellular charges.

I tested the phone at home, at an independent local coffee shop with a free public WiFi network, and at a Starbucks which - like most Starbucks - offers a fee-based access to a T-Mobile's WiFi hotspot. I also tested it from my car and while walking down the street to make sure it got good cellular coverage.

Usually when you want to use a T-Mobile hotspot at a Starbucks and other public locations, you have to pay for service and enter a user name and password to log on but T-Mobile is giving owners of this phone free access to its hotspot network for phone use only (you still have to pay to use your laptop at a Starbucks).

The phone also worked at the independent pubic WiFi hotspot and it worked on my home network once I entered my Wireless Encryption Protocol (WEP) security password from the phone's keypad.

Callers call the same phone number regardless of whether you're using the cell network or WiFi. In fact, it acts exactly the same way in either location. The only way you can tell is by looking at the screen. You'll see the name of the network and the color of the bars that indicate reception strength will change colors depending on what type of network you're in. T-Mobile is using UMA (Unlicensed Mobile Access) technology, which is a non-proprietary standard that is being adopted by other mobile carriers as well.

The most interesting aspect of the phone is the ability to seamlessly switch between cellular and WiFi as you move from one area to another. I tested the phone by making a call from a public WiFi network at a neighborhood coffee shop. While I was talking I walked away from the shop and as soon as I was out of range of the shop's WiFi network the call was quietly transferred to the T-Mobile cellular network.

Then I walked into a Starbucks and, within a minute, the call was handed over to Starbuck's WiFi network without any drop in call quality. I also tested the phone from home where it works great but when I walked out into the street the call was dropped.

At first I thought I might have encountered a bug but then I remembered that I don't have very good T-mobile coverage in my neighborhood. In other words, the phone was performing exactly as advertised, giving me good coverage through my home network even though I have sketchy cell phone coverage at and near my house.

[tbweb]

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