Monday’s Verizon iPhone announcement has shun media spotlight on Personal Hotspot, a new software feature that lets you easily share your phone’s 3G cellular data connection with up to five devices like notebooks, other phones and tablets. This feature is commonly found on high-end Android smartphones.

If the latest reports are true, wireless tethering will come to all iPhones via a rumored iOS 4.3 update, allegedly due in March, Redmond Pie reported quoting an anonymous source.

AT&T has never allowed such a feature on its network so Apple had to add necessary software support to a new version of iOS software powering Verizon iPhones.

Journalists attending yesterday’s press conference spotted the units the carrier had on display ran iOS 4.2.5. It’s a special version written to provide support for Verizon’s 3G CDMA network and Personal Hotspot feature. GSM iPhones running on AT&T’s network include iOS version 4.2.1. Personal Hotspot is enabled in the Settings app, with an optional wireless password.

Once turned on, you simply choose iPhone from the list of network service on your computer and voila – you’re online via your phone’s cellular connection. Devices can connect to an iPhone hotspot via WiFi or Bluetooth. An AT&T spokesperson said the carrier is "evaluating" Personal Hotspot feature, giving some hope that increased competition between the nation’s largest carriers may benefit all iPhone users, not just Verizon customers.

Source: Redmond Pie