LONDON, England -- An analyst from market research firm Frost and Sullivan sees little near-term profit opportunity for the vendors of Bluetooth chips and has expressed concern for the start-ups and smaller players.
In a commentary Michael Wall, wireless industry analyst, said that Bluetooth shipments will be no higher than 50 million chipsets this year and could be closer to 30 million without a significant ramp-up in the last quarter of 2002. This is the third opinion of Bluetooth prospects offered by market analysts recently.
Wall's view is that the smaller Bluetooth specialists are coming under pricing pressure from larger, deep-pocketed semiconductor manufacturers, but at the same time those start-ups have difficulties repaying venture capital investors through a share offering because of stock market conditions.
Wall observed that Texas Instruments and Infineon have announced aggressi ve pricing strategies, claiming chipset pricing at below $4 by the first half of 2003, but Cambridge Silicon Radio Ltd., up until now one of the leading lights of the Bluetooth industry, has not achieved significant penetration in the cellular telephone handset market, which he describes as key.
The longer that situation prevails the more companies such as Infineon, Philips and Texas Instruments are able to erode any technical advantage the smaller players may have achieved and the more they can leverage their access to major customers.