Naturally, there are some significant differences between a hotspot running on an iPhone and a traditional one running on dedicated hardware like a wireless router. The first is that the firmware on most smartphones and computers prevent their Wi-Fi radios from working as a true router; instead, they must be operated in "ad-hoc" mode, a special kind of Wi-Fi connection that allows two or more devices to communicate without a central hub, as is usually the case in a traditional network.

When used to provide hotspot functionality, ad-hoc mode provides an alternative to the need for a true router, although at the cost of higher network overhead and battery consumption. Thus, one of the reasons why mobile hotspots are usually limited to a small number of simultaneous clients is that, in ad-hoc mode, network performance decreases very rapidly with the addition of more clients. As another side effect, sharing your cellular connection over Wi-Fi is sure to reduce the battery life of the phone drastically, because both radios must constantly be receiving and transmitting.

So, if all the pieces are already in place, can we expect to see hotspot functionality for all iPhone owners? When asked about the Personal Hotspot feature at the Verizon event this week, Apple senior vice president of worldwide marketing Phil Schiller , "We did the hotspot feature because it's something Verizon offers, they have a system and specs for it in place. [...] We can't say if it will come to AT&T."

As you might expect from Apple, that's neither a "yes" or a "no." Given that the Verizon iPhones at the press conference were reportedly running iOS 4.2.5, some speculated that . A beta of the update was , and some sites have reported that the personal hotspot option replaces .