Despite persistent rumblings of discontent from participants and sideline observers, Bluetooth wireless technology has begun to take root with end-product implementations and lower-cost silicon.
The promise of tens of millions of sockets has Bluetooth poised to overtake wireless LAN technology in the coming year due primarily to significant adoption by high-volume cellular handset makers, according to analysts and silicon providers for wireless connectivity.
At the Bluetooth Developers Conference in San Francisco last week, silicon suppliers rolled out chipsets that they expect will hit the long-sought $5 price point that market observers say is needed for full-scale adoption. Observers also believe that, like most emerging technologies, a supplier shakeout is looming that will boil down the 30-company base of suppliers to a handful of players in the years ahead.
It remains unclear how many Bluetooth chipsets will have been shipped in 2001, as forecasts range from the 5 million units predicted by Micrologic Research to In-Stat Group's forecast of 13 million. Both research groups believe the market will grow significantly next year to between 45 million and 90 million units, reaching 1 billion in 2005.
To date, Texas Instruments Inc. has shipped more than 1.5 million Bluetooth chipsets and the company estimates that nearly 7 million will be shipped industrywide this year, said Bryce Johnstone, TI's worldwide marketing manager for Bluetooth products in Dallas.
TI projects at least half of next year's Bluetooth shipments will be used in cellular handsets, which means that anywhere from 5% to 10% of the 400 million mobile phones the industry expects to ship in 2002 could be equipped with Bluetooth.
Growing beyond 'geekware'
"Bluetooth is building momentum," Johnstone said. "You're starting to see Bluetooth in retail channels. Like virtually everything, it starts off as geekware but will end up becoming a fashion item. It w ill start to capture the imagination when people start seeing [Bluetooth-enabled] wireless headsets being used."
Jim Oursler, vice president of marketing at Ericsson Microelectronics North America, Richardson, Texas, said that while Bluetooth "is not the be-all-to-end-all in wireless connectivity, it definitely has a very useful space in applications concerned with power constraints and security. Next year we're going to see a significant number of household, name-brand consumer manufacturers with Bluetooth as an option in their products."
Last week, TI introduced its latest Bluetooth chipset, consisting of an ARM-based baseband with ROM and an RF transceiver, which the company said will be in production in the second quarter of next year for $5 in quantities of 2 million. Motorola Inc.'s Semiconductor Products Sector (SPS) plans to move its baseband and RF chipsets into production at about the same time for $5.90 in quantities of 1 million.
Downplaying the cost factor
"I've heard the argumen t that as soon as Bluetooth is available for $5, the volume will take off," said Gary Montgomery, director of marketing at the wireless local connectivity division of SPS. "I don't agree with that philosophy. I believe that as soon as the cost of implementing Bluetooth is exceeded by the benefit of Bluetooth, it will take off.
"To date, the Bluetooth market has been overhyped, and in some cases almost criminally. The fact is, the radios are fairly complex, and it's a complex standard," Montgomery said.
Ericsson's Oursler also believes the cost equation has been overplayed, and said price quotes in million-unit quantities provide little guidance. Ericsson, a founding member of the Bluetooth Special Interest Group, has created the most comprehensive solution, he said, which can be implemented for less than $15, moving to less than $10 next year.
"Everyone knows what their product is worth," Oursler said. "I'm a little skeptical about how well [$5 chipsets] will perform in the real world. People can end up with shortfalls in their designs."
One-chip vs. two-chip solutions
John Hodgson, chief executive of Cambridge Silicon Radio Ltd. (CSR), Cambridge, England, said a significant advancement for Bluetooth was last week's announcement by Microsoft Corp. that it will support Bluetooth in its Windows XP operating system.
Hodgson said CSR has gained an advantage in the Bluetooth silicon battle by offering a single-chip baseband solution with integrated RF. "The typical space budget in Bluetooth applications is significantly smaller than most other applications," he said.
Oursler said the single-chip path is not critical to Bluetooth advancement at this stage. "Ericsson has continued down a steady path of separating the radio and baseband," he said. "It's not a heroic experiment, but we're getting to the market with real-world production. We have a total run rate now of about 400,000 units per month."
There will be separate requirements for both one- and two-chip solutions, accord ing to Joyce Putscher, an analyst at In-Stat, Scottsdale, Ariz. In stand-alone applications such as headsets, a single-chip implementation will best meet requirements for the smallest form factor, she said. In cellular handsets, however, a separate RF chip will often improve performance and reduce interference from the handset RF. In time, the Bluetooth baseband will be incorporated into the handset baseband, Putscher said.