FOR SOME TIME NOW, I have discussed with those in the industry the void of market movement in the 56K Bluetooth modem space. So for that reason, it was especially positive to see that there were beginning signs for such products at the recent Blue-tooth Congress 2002. Two were shown at the CSR and Zeevo booths. It is looking like dial-up Bluetooth access points (AP) could be under the Christmas tree this year for the North American market.
The dial-up Bluetooth ALP will address the mass consumer market that does not want to spend $45 to $55 per month on a continual basis for broadband but is willing to spend a reasonable, onetime outlay for the benefits of untethered surfing and printing from their couch without installing a WLAN home network. If advertised and marketed aggressively enough, this could help to increase consumers’ knowledge of the benefits of products that offer Bluetooth cordless functionality then translate that knowledge into revenue. If not advertised and promoted effectively, these products could be slow to take off.
A greater level of consumer awareness of what Bluetooth is and what benefits it offers is the key to unlocking the box of consumer demand. Though knowledge is increasing, the low level of familiarity of Bluetooth by the average consumer is ensuring that mobile phone operators are still not feeling the consumer demand for Bluetooth-enabled handsets. Nokia and Motorola are very common phones in the United States, but Ericsson is not. Sony Ericsson has been the most aggressive Bluetooth-enabled handset manufacturer to date, but there has not been a significant push or driver thus far in the United States.
Since operators subsidize so many phones, it is necessary for them to see some benefit to offering Bluetooth-enabled phones to their subscribers. So they need to reap a return in terms of customer loyalty (for lower churn), obtaining new subscribers, or revenue. Driver safety alone could be a significant trump card in offering subscribers additional benefits. If operators begin to bundle mobile phones and Bluetooth headsets in an aggressive manner, in conjunction with a marketing campaign targeting hands-free use in vehicles for safety, demand could increase quickly.
On the acquisition front, comments were recently flying around regarding the acquisition of Ericsson Microelectronics by Infineon Technologies. The deal is expected to close in about two months. Infineon gains the module business via Ericsson, inroads to supplying semiconductors into wireless infrastructure and a supplementary customer list. Previously, STMicroelectronics began its acquisition of the wireline and wireless groups of Alcatel Microelectronics, while American Microsystems Inc. began its acquisition of Alcatel Micro’s mixed signal group. The acquisitions of Ericsson Microelectronics and Alcatel Microelectronics do not directly affect current market shares of Bluetooth chipsets.
Recent announcements by Texas Instruments for a $4 (BOM) Bluetooth solution via a ROM-based single chip and by Infineon Technologies for sub-$3.75 pricing (both high volumes) have set a new bar. Both use leading 0.13-micron RE CMOS processes, and volume production is planned for Q12003. Philips Semiconductors announced an affiance with Ericsson Technology Licensing for audio/video solutions. For space-constrained applications, Motorola will go into production in Q4 with a stacked chipset die solution in a 7mm-by-7mm-by-1.6mm BGA package. The price will be the same for the company’s separate radio and baseband.
Coexistence solutions were demonstrated by Silicon Wave (Blue802) and Zeevo (alternate wireless media access, or AWMA). Neither is based on the not-yet-finalized adaptive frequency hopping (AFH) scheme. These mechanisms are geared especially toward the PC market since the front-end can get overloaded in co-located situations (such as a laptop), which can still present a problem with AFH. The first coexistence solutions to hit the shelves are expected in the next six to nine months.
In-Stat/MDR estimates Bluetooth chipset shipments will climb from 10.4 million units in 2001 to 48 million this year, growing to 150 million in 2003.
Joyce Putcher is director and principal analyst of InStat/MDR’s Converging Markets & Technologies Group. She can be reached at jputscher@instat.com. InStat/MDR owned by Reed Business Information, the parent company of Electronic News.
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