By Michal Lev-Ram

You know the feeling: You just ordered your caramel machiatto (extra foam), sat down at a table and opened up your laptop. You log on, hoping to quickly check your e-mail, when all of a sudden a screen pops up asking for your name and credit card information. That’s when you realize that hopping online won’t be as quick — or as cheap– as you’d hoped.

Say goodbye to all of that. On Monday Starbucks (SBUX) announced it was dropping T-Mobile’s (DT)’ s $6-an-hour Wi-Fi service for AT&T, which will provide coffee- house customers with two free hours of Internet access a day. With about 7,000 Starbucks locations in the United States, that’s a major boon for AT&T (T). Now the question is, how long will hotels, airports and other venues be able to continue charging sky-high fees for a service that many people see as essential as running water and electricity.

“This is something that people want,” says Morningstar analyst John Owens. “I think customers will embrace this move.”

Of course, Starbucks’ hopes free Wi-Fi will convince coffee drinkers to not only opt for Starbucks but also to stick around longer and buy more lattes. To log onto the company’s new Internet service, customers will need to have an active Starbucks card.

“This is what customers have been asking for,” says Starbucks spokeswoman Sonja Gould. She says a typical Starbucks Internet customer uses one hour of Wi-Fi a day. The company will begin rolling out the new service at select locations this spring. By end of 2008, it will be available at all Starbucks’ U.S. stores.

When Starbucks first introduced its fee-based Wi-Fi service in 2002, it seemed like a novel idea. But today, when many consumers have become accustomed to getting their Wi-Fi for free, the model seems outdated. Last October the Seattle-based coffee chain began providing free Wi-Fi access for iPhone users to buy music on iTunes.

Put simply, people don’t want to pay for Wi-Fi — let alone deal with signing up for it. That’s why JetBlue (JBLU) has begun testing a free in-flight Wi-Fi service that gives limited online access to its passengers.

Jupiter Research analyst Julie Ask says the Wi-Fi offered in hotels, restaurants, airplanes and coffee shops like Starbucks never needs to be completely unlimited and free. But most consumers — who just want to check e-mail or get a quick read of the news — do expect some form of free access.

“It’s a tool that builds loyalty for companies,” says Ask.

Many of Starbucks’ competitors already offer limited free Wi-Fi. Minneapolis-based Caribou Coffee gives customers a free hour a day. Those who don’t will probably need to if they want to compete.

By Michael V. Copeland

If you want a hint at where innovation in the gadget world is headed, talk to the chip guys. These nuggets of insanely complex silicon that companies like Intel, AMD (AMD), Atheros, Broadcom and Marvell (MRVL) are creating today will end up in the phones, laptops, televisions and mobile video/music/Internet devices of tomorrow.

We all know that Intel is dead-set on making WiMax — wireless access measured in square miles — a reality. When they start shipping WiMax PC cards in laptops is another matter (Intel (INTC) said it’ll be around the middle of the year), but when they do, your laptop might start acting and looking more like the tidy mobile device it should be. Think about a sub-subnotebook machine, always connected to a broadband signal — it might make video calls via VoIP, stream movies, take photos and send them wirelessly back home or to the office. I want one now, but it doesn’t happen without the chipset (and the network infrastructure to go along with it). That’s a ways in the future for most of us, especially in the United States. But the capability is coming soon, and a raft of new gadgets that take advantage of it will follow.

One of the most interesting chip trends I saw last week at the Consumer Electronics Show in Las Vegas was encapsulated in a little device called the Eye-Fi. Here’s a gadget that exists today, but has lots of implications for tomorrow. What the Eye-Fi does is automatically stream photos from your digital camera via your Wi-Fi network to your PC or an online photo service. What the Eye-Fi team has done essentially is wrap a service around a common flash memory card and a low-power Wi-Fi chip from Atheros (ATHR). It’s these lower power Wi-Fi chips that are extremely interesting, when you start thinking about other services they enable.

All the manufacturers in that realm of the chip business are working on prototypes that are as power efficient and powerful as possible. But think about all the things that can happen if you can put Wi-Fi into all sorts of mobile and fixed devices and connect them to either the Internet or a private network. Gadgets get smart and can receive, send and potentially respond to whatever information they are set up to handle.

It could be smarter light switches that turn off and on via an e-mail or text message, or LCD picture frames that stream your e-mail to your bedside and upload a recipe to the kitchen screen every day before dinner. Or maybe some slick mini-display that scrolls updates from your Facebook friends on one side, reads you the news on the other, and does any number of other things that you find important or entertaining.

Who knows? The possibilities are numerous, but it begins with these chips now starting to ship. It also calls into question the future of other wireless standards like Bluetooth and Zigbee. Zigbee, a low-power wireless technology, has never really taken off. Bluetooth has, but combining Bluetooth with Wi-Fi in devices is much more of a headache than engineers would like it to be. Low-power Wi-Fi plays nicely with its full-power brethren and has the potential to sweep both other wireless standards away.

In the Broadcom (BRCM) booth at CES I got a demonstration of a lower power chip now ready to ship that allowed for high-definition video, graphics and audio in such a small package that you can already see all the little video devices/phones it will spawn. One very cool potential application combined that low power HD video chip with a motion control chip that Broadcom builds for the Wii controller and another very popular music device/phone that begins with the letter “i.” Basically, you get a handheld Wii, which, I would bet you’ll be seeing sometime in the near future.