Bluetooth spec released, Canadian companies poised to move forward

Bluetooth-enabled products could arrive on the Canadian market by year-end, now that a final decision has been reached on standards. This month the Bluetooth Special Interest Group (SIG), a global standards organization representing more than 2000 companies, released the specifications for Version 1.1 of the short-range wireless communications standard. The first iteration of commercial products to hit the market will be computer peripherals, including wireless keyboards and mice, and cable-less headsets for mobile phones. Sales of Bluetooth-enabled PC cards for laptops have been brisk since they landed on the market late last year. While the hype of Bluetooth hasn’t yet lived up to expectations, experts told a full audience at a Canadian Wireless Telecommunications Association-sponsored conference earlier this month that products using the new technology are just around the corner. First on the market will be those that connect legacy products to each other, Brad Hurtubise, executive VP and director at Wireless Networks Inc, told delegates attending the March 6 conference, entitled Bluetooth: A World Without Wires. Once the price points drop, Bluetooth will be integrated into wireless devices, including a gamut of mainstream consumer-oriented products. "We’ve got the recipe, the specs, the ingredients are all there," says Skip Bryan, global area manager-Americas at Ericsson Technology Licensing AB in Research Triangle Park NC. "The products are now in the oven and coming out and we will soon be blowing out the candle for this year as being the (Bluetooth) launch year." The Swedish wireless equipment manufacturer may be the first out of the gate with a Bluetooth-enabled headset for its latest world phone. Bryan says the headset has already received Federal Communications Commission approval, and an application for certification of the Bluetooth module, which plugs into the bottom of the cell phone, should be filed within the next few weeks. At US$50 each, Bluetooth chips are still expensive, and that’s limiting their application to legacy devices. Analysts anticipate the price will drop to about US$5 per chip set once volume production ramps up. At that point, Bryan says it will be possible to embed the technology directly into mobile devices, including cells phones and PDAs.Those price points aren’t expected to become a reality until 2003, according to Hurtubise. New products will be introduced this year, with volume production on schedule to begin in 2002. As manufacturers begin to realize the economies of mass production, chip prices are expected to decrease to between US$10-$15 next year, and as low as US$5 in 2003. Handset market key to Bluetooth Fully integrated Bluetooth functionality is expected to arrive in handsets first, which should help drive consumer adoption. As the box on page 1 demonstrates handsets will garner 73 per cent of the top seven Bluetooth applications by 2005. Analysts estimate that penetration of Bluetooth-enabled wireless devices will grow from 2001 levels of 2.3 per cent to more than 65 per cent in 2005. "And primarily that’s going to be a function of the chip set costs coming down rapidly over the next few years, such that the manufacturers will include Bluetooth functionality as an inherent part (of the handset)," says Steve Gallagher, director business development at IL-based Motorola Inc. But it won’t be just the quality of the technology that drives Bluetooth acceptance. The marketing is equally important, says Gallagher. "It’s the third party application developers that are going to make or break Bluetooth," he explains. The marketing of Bluetooth is critical in this regard. If the consumer doesn’t know what Bluetooth can do for them, then it won’t become a particularly interesting offering, he adds. Bluetooth is about access to the Internet and networkingAnother key factor in the growth and acceptance of Bluetooth is its ability to provide access to the Internet from various types of devices. The concept of the Internet Bridge needs to be realized if Bluetooth is to live up to its hype, explains Gallagher. This window to the Internet will be provided by Bluetooth access points located in high traffic areas, such as airports and retail outlets. This is one area of product development that has been a huge surprise to many industry observers. Several companies are now developing these access points with a view to integrating them into the larger wireless infrastructure. Their vision: ubiquitous device-to-device communications. At this point in its development, Bluetooth is still seen as a replacement technology for cables, whether from the PC to a keyboard or for cell phone hands-free devices. Some analysts anticipate Bluetooth will become the de facto standard for the networking of all types of wireless devices. Jeff Rabin and David Hodgson from Dundee Securities finished the day-long conference by giving attendees the technology analyst’s perspective of Bluetooth. There are still several hurdles that need to be overcome, they stressed, before Bluetooth makes it into the mainstream. One stumbling block is the cost of chip sets. Dropping to US$5 is a good start, dropping to US$1 is even better, they said. Bluetooth’s success will ultimately depend on the number of consumer devices that use the technology. As Metcalfe’s law describes, the value of a networking device increases exponentially as the number of devices increases arithmetically. Of course, it won’t be the technology that drives consumer acceptance of Bluetooth as much as it will compelling applications. Development on that front is still in progress.

Bluetooth spec released, Canadian companies poised to move forward

News | March 19, 2001

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