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Bracing for Bluetooth's Bite
by Anna Urosevich
Telecom Business, Feb
1, 2001 Major obstacles stand in way of teething technology's
success * Bluetooth attempts to slough off shackles of
market delay
* Bluetooth companies square
off against 802.llb
* Customers slow to respond
to technology's hype
Janet Jetsetter races down
the freeway to pick up her daughter at the airport. She
whips her Palm VII out of her blazer pocket to locate
her daughter's mobile-phone number. After finding it,
with eyes on the road, she hits the dial button and chucks
her Palm back into her pocket. The device, being Bluetooth-enabled,
initiates an instant connection to Janet's mobile phone,
which rests securely on her right hip. Toting her new
Ericsson headset, Janet speaks to her daughter hands-free
as she zips past the traffic.
This scenario is one that,
after more than a two-year delay, the Bluetooth special
interest group (SIG) plans to manifest for consumers and
mobile professionals alike beginning this year. But, for
all the hype about Bluetooth-enabled devices, they aren't
exactly crowding the shelves of consumer electronics stores.
BLUETOOTH'S CAVITIES Some
of the estimations made by the initial five-promoter companies
of the SIG - Ericsson, Intel, Nokia, IBM and Toshiba -
in 1998 may have naively configured the amount of time
it would take to finalize the specifications of a short-range
wireless protocol. And while strength may be found in
numbers, the addition of another 2,069 companies to the
SIG since 1998 poses its own unique set of challenges.
"Whenever you have this
kind of industry-wide, de facto standard that everybody
at least superficially favors, you just run into the problem
that it's very slow to get all of the specific standards
and protocols accepted and out in the marketplace, versus
if one company just took the lead and developed it all
themselves," says Elliott Hamilton, director of the Strategis
Group's global wireless group.
Another related factor that's
been stifling Bluetooth's emergence, as with any new technology,
is cost. Manufacturers have to discern whether or not
implementing a new feature gives them enough differentiation
to be worth the added cost. Microchip manufacturers have
been trying to develop an economical chip set that can
be embedded in the various devices - phones, laptops,
PDAs, printers - to make them Bluetooth-enabled. Talk
circulating in the industry posits $5 as the eventual
target of a Bluetooth chip set.
"Eventual" is the key word
here.
Troy Holtby, product manager
for mobile products at 3Com, sees a catch-22 at work:
"It's not going to get cheap until people buy more. And
people aren't going to buy more until it becomes cheap."
Success of consumer adaptation
to this technology depends upon the ubiquity of devices.
And when some of those products
and their corresponding services - such as Motorola's
Timeport 270 phone and PC-enabler - card hit the store
shelves, members of the Bluetooth SIG still may not have
overcome their biggest Bluetooth-ache, the 11-megabit
per second wireless networking protocol that's known as
Apple's AirPort in the Macintosh world and as 802.11b
in the PC world.
802.11b poses many challenges
to Bluetooth, both from a technological and a marketing
standpoint. Both wireless protocols operate in the same
unregulated 2.4 gigahertz frequency spectrum. The difference
is that 802.11b is an enterprise tool that requires an
infrastructure, generally networking in a corporation,
and it delivers much higher data rates than Bluetooth
(the latter transmits data up to 30 meters at 720 kbps).
Bluetooth's modus operandi is ad-hoc networking, or the
ability to form networks on the fly without having a single
server device attending to many clients.
But Bluetooth might be able
to offload some of 802.11b's use in a corporation, maintains
Skip Bryan, director of technological market development
at Ericsson Inc. Suppose that two or three coworkers share
a printer: It needn't be on the network backbone.
"Maybe it's just a local
printer that can be shared via Bluetooth," he says. "That
takes some of the workload and congestion off of the Internet
within a corporation."
The problem with this overlapping
functionality - or with 802.11b and Bluetooth even remotely
coming into contact with each other - is that they will
significantly interfere with each other's transmissions,
so much so that the 802 connection will be completely
destroyed.
A confrontation looms on
the horizon, when Bluetooth-enabled devices begin to infest
802.11b-powered corporate environments from the bottom
up, from the employees themselves. It seems highly improbable
that IT department managers will issue edicts that force
workers to leave their Bluetooth-enabled mobile phones,
PDAs and laptops in their cars. But if this issue of incompatibility
is not addressed by the SIG adequately enough, "then it
will come down to these two technologies competing and
I think both products will be marginalized in that event,"
Holtby says.
Bluetooth and 802.11b will
also square off on the marketing front. The challenge
for Bluetooth to differentiate itself from 802.11b will
be huge, says Sarah Kim, an analyst with the Yankee Group's
wireless mobile technologies planning services:
"Can I tell the difference
between 802.11 and Bluetooth? They keep telling me yes;
they're two different products. I understand that. But
would my mom be able to walk into a store, pick up a box
and know that she's the right user for the right product?
I'm not convinced," she says.
CHOMPING AT THE BIT Such
hurdles, though, have not instilled a defeatist spirit
among the SIG's ranks. The goal of cable replacement between
various devices to allow personal-area networking is just
the tip of the iceberg.
"Think of the possibilities,"
Bryan says. "A lot of the products being readied are for
access points so I can access the Internet or Ethernet
from a Bluetooth node, say at an airport or sports arena,
to give me the information I need without waiting in lines.
You know, the concept of ordering my peanuts and beer
while I'm sitting in the ballpark - directly from my seat
- or placing a bet while I'm in the racetrack, those have
real utility."
Mike Wilson, CEO of Red-M,
a UK-based company that develops Bluetooth access servers,
envisions three phases in the de- ployment of Bluetooth
networking solutions. The first phase is cable replacement,
wherein a PDA, for instance, could synchronize with a
PC without cables. The second phase is actual in-building
Bluetooth networking and the third "is a truly global
infrastructure whereby you can connect those networks
in a true personal-area sense."
As an example, pretend that
a savvy world-traveler, Torvald Telekom, checks into a
particular hotel in London. He is recognized as a preregistered,
premiere Bluetooth customer. He can get his key assigned
to him with his PDA, open the door to his room with his
mobile phone and access the Internet on his laptop, using
his mobile phone as a modem. If Torvald were to stay at
the same hotel chain when paying a visit to New York,
he'd receive the exact same services. He has effectively
linked the Bluetooth network in London with the one in
New York.
Wilson predicts that Blue-tooth-enabled
devices will start vying for consumer attention in the
next three to six months. Companies such as airlines and
hotel chains will take advantage of its lack of ubiquity
by deploying it in a competitive way. He believes the
technology will trickle down from its target market of
mobile professionals to the consumer market by 2003, and
that the integrational networks will be established by
2005.
It may seem like a long
time to wait to turn a profit, but SIG members believe
that their patience will be more than handsomely rewarded.
"It's a natural progression
that's going to have to happen, so we feel that the wait
is definitely worth it," says Matin Moosa, COO of Atinav
Inc., a New York City-based provider of universal Internet
access that recently applied for membership in the SIG.
In their euphoria, though,
members of the SIG have overlooked one other small problem:
whether or not people even want the wireless technology.
"The whole push by the carriers
is they want us to use more data," Kim says. "This is
just another technology that will facilitate the use of
data. But our survey still shows - Ding! Ding! Ding! -
that people still just want voice. As far as data is concerned,
it's a small percentage of users. If you're only planning
to surf the Internet on your phone, you don't really need
Bluetooth. It's great if you can use data, otherwise it's
kind of pointless."
Bluetooth's origins can
be traced back to 1994 when Ericsson Inc. sought to circumvent
the limitations of infrared technology in mobile-telephony
devices.
"We looked at what was going
to come after the infrared that we had been building into
phones," says Skip Bryan, director of technological market
development at Ericsson. "We wanted a cableless technology,
one that would be longer range than infrared."
Ericsson wanted to eliminate
infrared's line-of-sight requirement. Radio technology
held the key, but three criteria had to be met: cost,
power consumption and size (the radio-outfitted microchips
had to fit in handheld, battery-operated devices).
After delivering a demo
product that met those requirements, Ericsson knocked
on Intel's door. The latter liked what it saw.
"So we grew the special
interest group (SIG) and went from there," Bryan says.
Once Intel was on board,
IBM and Toshiba joined Ericsson from the computing side
and Nokia from the phone side in 1998. By December of
1999, four more companies signed up for promoter group
status: Motorola, with its telephony and networking; Lucent,
with its networking and supplying of componentry; 3Com,
with its networking; and Microsoft, with its operating
system.
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