Internet Connection Sharing Coming To iPhones Soon

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The ability to convert your iPhone’s 3G data connection to a Wi-Fi signal that you can share with your laptop technically exists as part of the phone’s hardware. The limitation, up until now, is that the feature needs to be implemented on the software side and turned on by your carrier.

AT&T’s iPhone has had “internet tethering” for a while, which allows you to connect your phone to your computer via the connected cable or Bluetooth and share the data connection that way, but a new feature coming in the next revision of Apple’s software will let you turn your iPhone into a little Wi-Fi router. You’ll then be able to share your connection with up to five devices—no cables, no Bluetooth. It’ll simply be seen as a Wi-Fi network.

With Verizon’s iPhone announcement yesterday, one of the key differences highlighted between the AT&T version and the Verizon version is that the Verizon version will have this connection sharing—called Personal Hotspot—built in from the get-go. This has led some to speculate that AT&T may flip the switch on personal hotspot features on as well in order to compete.

Boy Genius Report has confirmed that the feature will be part of Apple’s next operating system update, iOS 4.3, but it’ll be up to the carriers whether or not they want to let their customers use it.

And it likely won’t be free, either. Verizon currently charges $20 extra on most smartphone plans to enable Wi-Fi hotspot functionality, but throws in an additional two gigabytes of data transfer for you to use.

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