"Data is a true commodity that users want to commoditize even further"
The days of squatting at a Starbucks for access to their free Wi-Fi might be coming to an end. An increasing number of companies, from Google and Microsoft to Karma and FreedomPop, are trying to make it easier to get online at no cost to consumers. Internet access has transitioned from luxury to commodity, at least for those who live where these companies are able to operate.
FreedomPop wants to continue the commoditization of data by offering free Internet access over Sprint's LTE network. The company is today announcing the FreedomSpot 5580 LTE hotspot, its first device to operate on the network and a precursor to the company's entry into the smartphone market later this Fall. The device will offer 500 megabytes of free data each month -- users can elect to purchase more data or simply use FreedomPop as a free service.
"Data is a true commodity that users want to commoditize even further," says FreedomPop CEO Stephen Stokols. Many people don't want to pay for Internet access, he says, and would prefer to avoid paying an exorbitant amount for data they probably aren't even using. (Which I did just last week when I paid Verizon $60 for 3 gigabytes of data despite only needing the hotspot for a day or two.) Stokols hopes that offering free data will allow FreedomPop to gain traction while simultaneously earning the trust of its users, some of whom might be willing to pay for extra data, "rollover" features, and the like.
FreedomPop has also commoditized the hardware used to access its service. The company sells "sleeves" for the iPhone and iPod touch, a "hub" that offers home Internet access, a hotspot, and, soon, a phone and other devices.
"It's pretty easy for us to add initial devices and niche devices that will allow us to go for a slightly bigger market," Stokols says. "If we want to take on the whole market we have to have more than just a hotspot, or even a hotspot and a digital hub for the home."
The company is betting that there's an empire to be built atop layer after layer of commoditized products and services. It's giving customers between 500 megabytes and 1 gigabyte of data for free, each month. It's selling the products used to access its service at low prices meant to get them to as many consumers as possible. And soon, it will begin offering free service to smartphones that can be bought cheaply from its store or brought over from another carrier. Then it just needs to show that there's some proof that offering a free service on cheap or effectively free devices can somehow equal a sustainable company.
[Image courtesy Arkangel]