Chipping away at the wireless market; Radio device replaces cable links

If you had to pick a poster child for the Telecommunications Bust of 2001, Bluetooth would be a top contender.

Overhyped and underwhelming, the wireless technology with the odd name failed to meet the buzz unleashed by its promoters in the late 1990s, when anything wireless was touted as the Next Big Thing.

Lately, however, Bluetooth -- a short-range wireless invention that replaces computer cables and lets digital gadgets "talk" to each other -- looks poised for a rebirth.

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"It was left in the dust and now it's rising again," said Ken Furer, an analyst with IDC, a technology research firm based in Framingham, Mass.

Shipments of Bluetooth silicon chips will triple this year to almost 34 million, up from 11.2 million last year, according to Allied Business Intelligence, a market research firm based in Oyster Bay, N.Y., which predicts more than 1 billion shipped by 2007.

Although the average technophile probably knows something about Bluetooth, the average consumer probably doesn't.

But that's expected to change - some say within the next six months - as Bluetooth chips find their way into mobile phones, hands-free headsets, cameras, and cars.

Named after the 10th century Danish king, Harald Blatand, who unified Denmark, Bluetooth was created in 1998 by a consortium of well-known electronics manufacturers that included Ericsson, Toshiba, Intel, Nokia, and IBM.

The companies set out to develop a common way for digital devices made by different manufacturers to communicate with each other over short distances when equipped with a Bluetooth silicon chip. Technically speaking, Bluetooth is a specification, or set of rules, that standardize wireless transmission of data between devices, and the chips are what make that transmission possible.

A computer with Bluetooth can send a file to a Bluetooth-equipped printer, thus vanquishing the tangle of computer cables snaking around your desk.

With speeds of about 750 kilobits per second, a range of about 30 feet, and the ability to send its signal through materials - it doesn't need "line-of-sight" to work - you could keep your computer upstairs and printer downstairs, for example. Bluetooth also gives you the ability to "sync" or copy address lists and contact information between a digital palm-style organizer, cellphone, and laptop computer.

One area where Bluetooth is already on the market and relatively easy to use is in cellphones and the headsets used for hands-free conversations. Close to 5 percent of all cellphones have Bluetooth now and that number is expected to rise to 88 percent in 2007, according to Allied Business Intelligence. The research firm also predicted that about 3 million headsets will incorporate the technology this year, with more than 100 million expected in 2007.

"Phones are going to give [Bluetooth] a push," said Furer.

Bluetooth-equipped phones let you do a number of things, the most practical of which is getting rid of the wire that connects a cellphone to a hands-free headset - a device required for anyone who wants to drive in New York and talk on the phone at the same time.

AT&T Wireless, for example, sells a phone made by Sony-Ericsson equipped with Bluetooth along with two types of headsets and expects to introduce as many as 10 new Bluetooth phones in the first six months of next year.

An AT&T Wireless Bluetooth-equipped phone lets you keep your phone in a purse or briefcase in the back seat of a car, and still talk on the phone.

"We've been working to get Bluetooth out of the realm of geekdom," said David Brudnicki, director of emerging technologies at AT&T Wireless.

Others hoping to remove Bluetooth's geek factor are car manufacturers, a number of which recently said they would build Bluetooth into their 2003 models, including Ford, BMW, Saab, and Daimler-Chrysler.

Cars equipped with Bluetooth would simplify hands-free conversations by having What are the best car speakers carry a caller's voice.

Some Bluetooth proponents say the delay in rolling out Bluetooth was expected, given the complexity of a technology that lets so many different types of information and data move between devices.

Generally, radio technologies like this take 10 years to reach the marketplace, and this one took four, said Dave Curl, a spokesman for TDK Systems, which sells a variety of Bluetooth gear.

But others say the companies involved in the original consortium weren't willing to spend the time or effort to get their devices to work together.

Other analysts say the trouble was compounded because manufacturers refused to spend the extra money to buy chips for their devices, unconvinced that adding Bluetooth would make their products more attractive to consumers.

Slowly that changed, and with the greater demand for the chips came needed price drops. From about $30 per chip set in 2000, the price is now between $8 and $9, with sub-$5 chips expected by 2004, IDC's Furer predicts.

That low price means electronics manufacturers are much more likely to include the Bluetooth chip in their products.

In addition, a number of big players have recently jumped into the Bluetooth game, including Apple, which now includes Bluetooth support in its operating system, and Microsoft which includes support in Windows XP, its latest operating system.

The technology is not without its challengers.

For a while, some experts predicted that the fast-growing WiFi, a wireless local area network, would usurp Bluetooth. But now wireless experts seem to agree that the two technologies are complementary.

Bluetooth uses less power and works to link devices at short range, and WiFi delivers high speed wireless Internet access.

Another potential competitor is something called Wireless USB, a technology also aimed at replacing computer cables.

Geoff Anderson, vice president of Sony Electronics' advanced wireless technology lab in Park Ridge, said his company is looking at several wireless technologies, including Bluetooth, and is "testing the waters" with a Bluetooth-enabled video camera to see how consumers use the technology.

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"Everything right now is in the infancy stage," said Anderson.

Bluetooth may still be in its infancy, but some think the growing pains are almost over.

Thomas Q. Brady, a 24-year-old who writes for Geek.com, dove under his desk at least once when he set up his Bluetooth-enabled cellphone, laptop, and digital organizer so they could share information, but the whole process took only about 20 minutes, he said.

"It's not perfectly there yet. It needs to be a bit easier to use, but it's very close," said Brady.

Mike McCamon, executive director of the Bluetooth Special Interest Group, a trade association aimed at developing the technology, downplayed the first signs that Bluetooth was entering the marketplace.

"Even getting 25 million devices [equipped with Bluetooth] we don't necessarily see as a resounding success," said McCamon. "We expect and are planning for the technology to be in hundreds of millions of devices."