Rosy Outlook For Bluetooth

Revenue from Bluetooth-enabled products could reach $333 billion by 2006, according to a new market survey by Frost & Sullivan.

Under development for six years, Bluetooth technology is finally coming of age, with Europe taking the lead in embracing the technology and buying Bluetooth-enabled devices, the report concluded. Of the countries participating in the survey, the three currently testing Bluetooth products are all in Europe.

Despite lengthy delays, Bluetooth-enabled devices are "set to slowly revolutionize communications," the study says. Still, the technology must overcome the "confusion and caution" of the telecommunications market, especially in light of problem-plagued third-generations wireless services and the disappointing showing of Wireless Application Protocol (WAP) technology.

"Bluetooth is also a new wireless technology, with the potential to be overmarketed," the survey says.

The survey of about 120 network managers found that "end users are, in principle, willing to embrace Bluetooth technology. End users see flexibility and convenience as its biggest benefits."

Teething problems such as interoperability, robustness, interference and perceived security flaws must also be overcome. Concern over security was the most common problem cited.

End users said they expect interoperability issues to be resolved before products roll. "Interoperability hits at the silicon, product and application level," the report says. End users expect Bluetooth to provide "seamless interdevice connectivity. They may be in for a surprise," the survey notes.

Shipments of Bluetooth-enabled devices are forecast to jump from 4.2 million to 1 billion between 2001 and 2006.

During that time, revenue would rise from just under $2 billion to $333 billion, thanks to "Bluetooth anticipation sweeping the global personal computer and cellular phone industry."

With standard version 1.1 now being certified and more than 100 products qualified, rollouts may have cleared the biggest hurdle. Bluetooth now needs to gain market acceptance, the report finds.

Potential Backlash

Most users consider Bluetooth a wireless local-area network technology, said Jan ten Sythoff, mobile and wireless program manager at Frost & Sullivan. "It is important that the industry increase awareness of the capabilities and limitations of the technology, or disappointment could lead to a backlash," he said.

But because it is widely seen as a wireless LAN, companies with wireless networks already installed are far less likely to invest in Bluetooth products.

"Associated with this issue is, unsurprisingly, the finding that interference is a much more important issue for companies which already have a wireless LAN installed than those which do not," the study finds.

The authors add that Bluetooth should be sold "application by application." Bluetooth "is a technology which replaces an existing solution. If and when it becomes ubiquitous, it will be revolutionary, but this will . . . take several years."

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