It's been known for some time that iOS 4.3 would bring mobile hotspot (as opposed to tethering) functionality to iOS, but it turns out that the new feature will not support the five devices that the Verizon iPhone currently has, but only three. Is AT&T to blame? Not so fast.
Although the Verizon iPhone's hotspot feature, which is similar to the hotspot feature on its other devices, including Android phones, that iPhone 4 is running iOS 4.2.5. It seems that the limitation on the hotspot feature in iOS 4.3 isn't to blame on AT&T. Apple's iOS 4.3 page clearly says the feature will only support 3 other devices in hotspot mode. It would appear we cannot blame the carrier whipping boy of choice, AT&T.
What does that mean? A mobile hotspot appears to a wi-fi capable device as just another wi-fi network. It's a lot easier than having to attach a device to say, your laptop via cable (which is known as tethering) and faster than Bluetooth tethering (using Bluetooth connectivity to connect a laptop to the 3G device). Anything past three users requires tethering by Bluetooth or cable.
Until now, AT&T hasn't even had mobile hotspot service on its iPhone. Even if it's only limited to three, this is still a major step. Based on the information on Apple's page, it would seem that Verizon users, once they "Catch Up," will see the same limitation. iOS 4.3, which will release on 3/11, will only support the GSM iPhone 4.