3 slashes MiFi costs, as vendor warns of poor sales volumes

Hailed for its innovation at launch, the UK operator 3 has now announced big price cuts to its MiFi (mobile Wi-Fi) offering. The MiFi package, which enables users to share their mobile broadband between multiple devices by creating a personal Wi-Fi network, has been reduced in price by around 33 per cent for one month contracts as well as pay as you go.

This move comes as Novatel, one of the pioneers of MiFi devices, saw its share price crash by nearly 30 per cent when it warned that MiFi sales were likely to be flat or slightly down in Q4, compared to Q3.

Some industry analysts have previously warned that the MiFi device was too expensive and was vulnerable to threats from manufacturing giants such as Huawei. Also, Marvell, which makes the MiFi chipset, has already shown it integrated into a handset, suggesting that the market for dedicated personal WLAN products could be a short lived one, before the capability is incorporated into other units.

Regardless of the likelihood of Chinese vendors entering the market, Novatel's old rival Sierra Wireless recently announced plans to expand into the personal Wi-Fi sector. This promoted Nick Agostino of Research Capital, to comment: "With slower uptake and increasing competition in this category from Huawei and soon Sierra, our concerns for the longevity of the category are raised, as well as near term implications for Novatel."

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