Bluetooth goes mass market

By Lucas van Grinsven

AMSTERDAM: Thanks to an innocuous radio technology invented in Sweden, traders at Deutsche Bank in London can finally go to the bathroom or slip away for a cigarette and not miss a beat.

The hard-pressed bankers, who until recently were glued to their desk-mounted trading screens, can roam around the office with a tiny handheld computer version of their desktop screen which is hooked up to a wireless access point using Bluetooth technology. It is just one example of how far Bluetooth has come since engineers at Sweden's mobile phone and network company Ericsson starting developing it in 1994.

It is also evidence that Bluetooth is now on a collision course with rival short-range wireless technology 802.11, also called Wireless LAN or WiFi, which has taken a lead in the U.S. but which also has security disadvantages that make companies like Deutsche Bank look at alternatives such as Bluetooth. The Bluetooth industry gathered in Amsterdam this week for its annual trade show, and although analysts stress that 802.11 and Bluetooth are complementary technologies, many companies here are showing products that offer wireless Internet access, just like 802.11, as well as a host of other services. This confusion was not what Netherlands-born Jaap Haartsen had in mind when he single-handedly invented Bluetooth in his Swedish lab. The Ericsson researcher, soon joined by a team of developers, wanted to replace the spaghetti of computer and phone cables in the home or workplace with a simple wireless alternative.

Bluetooth as a cable replacement, for instance between a cellphone and a headset or a handheld computer, is the first application to hit the mass market this year.

Several Bluetooth-enabled cellphones from Nokia , Ericsson and Motorola are already on the market in Europe, Asia and the U.S. Hewlett-Packard's Compaq sells an iPAQ handheld computer with Bluetooth built in. "This is the first year we have mass-market devices," said Nokia's connectivity business development manager Tom Nyberg.

German-American DaimlerChrysler, which will be the first carmaker to introduce Bluetooth for hands-free calling and car entertainment later this year, believes that this basic idea of cable replacement will make or break Bluetooth.

Seventy percent of all U.S. wireless call minutes originate from a car, but new legislation in the U.S. and Europe outlaws handheld phones. Docking stations for handsets damage the car interior, which is why Chrysler bets on Bluetooth.

Bluetooth allows for the handset to stay in a shirt pocket or handbag as it automatically activates the audio system when the driver enters the car. The radio will display the phone's caller identification and signal strength.

Car makers around the world, including BMW, Toyota and Ford, are working on their own Bluetooth offerings that will sell for around $300 per system.

"Bluetooth in the car will be the dominant application that determines its long-term success," said Jack Withrow, director of Telematics Business at Chrysler. He sees millions of Bluetooth-equipped cars in three to five years time.

Already, major Japanese laptop computer makers have fitted their top-of-the-range models with Bluetooth so they can wirelessly hook up with printers, cellphones, mice or even a digital camcorder from Sony Corporation. Microsoft has announced it will soon ship Bluetooth mice and keyboards.

Toshiba has taken the concept one step further by showing a fridge and a microwave that wirelessly connect to a tablet computer. The "talking fridge" which has haunted the Internet community for half a decade became reality here when the Toshiba machine reported it ran out of beer. Meanwhile recipes on the screen activated freezer programs.

In the professional environment, Swedish-Swiss engineering firm ABB has Bluetooth-enabled sensors on car-manufacturing robots in order to get rid of fragile cables, said its Chief Technological Officer Markus Bayegan. "It's cheaper to install and more flexible," he said.

Bluetooth, which comes a little chip with an integrated radio that automatically detects other products with Bluetooth chips within a 15 metre (50-feet) radius, will sell below $5 per chip later this year. That's cheap enough to make it a mainstream feature in many electronics products.

Research groups In-Stat and Frost & Sullivan estimate that Bluetooth chip sales were around 10 million units last year, and will grow to around one billion by 2006. The technology is inherently secure, because its signal hops over a radio frequency range which makes snooping difficult. Companies like privately held Red-M and Cambridge Silicon Radio showed products and designs for Bluetooth access points to hook devices onto the Internet, competing with 802.11. Analysts and industry players here emphasised that 802.11, which is an Internet access technology, reaches six times further than Bluetooth and gives higher download speeds. But in many small shops and homes Bluetooth's 15 metres range is sufficient with security built in.

Whichever technology gets the upper hand -- 802.11 already has a large user base in the U.S. and is growing in Europe -- most companies here said they are working on technology to let the two co-exist in a way that a user never knows which technology creates the connection.

(C) Reuters. Ltd.