Wireless networks based on Bluetooth technology next year will begin to transform some restaurants, airports and even stores by letting customers access information free of charge on their own portable devices.
Speakers told packed sessions at last week's Bluetooth Developers Conference in San Jose, California, that wireless LANs in public spaces will be one of the major applications of Bluetooth. Bluetooth is a protocol for wireless communications between devices, designed for distances of 35 feet or less and intended originally to replace wires between PCs and peripherals or between portable devices such as handheld computers, cell phones and headsets, which originally was designed to replace cables for connecting devices.
However, analysts say such services may not pay for themselves as a way of drawing in customers, and billing for them would be problematic. Moreover, another wireless LAN technology, IEEE 802.11b, has a head start -- for now.
In-building services provided over the 721k bps (bit-per-second) Bluetooth technology may bring services similar to third-generation wireless data to many locations before 3G networks are fully deployed, according to Simon Gawne, vice president of marketing and business development at Red-M, a subsidiary of Madge Networks NV that makes servers and access points for Bluetooth LANs. The first 3G services are set to debut in mid-2001 in Japan, but in most locations they are not expected to roll out until 2002 or 2003.
Red-M partners will implement Bluetooth LANs next year in offices, airports and hotels, Gawne said in a presentation. Hurdles still to be crossed, however, include roaming from one access point to another as customers move through the site and security to keep visitors off a private LAN while they are using a facility's LAN for Internet access.
The impact on businesses and consumers could be dramatic, however. In Bluetooth-networked stores, for example, users might be able to synchronize their shopping lists with a current map of the store and get directions to each item, according to Daniel Kivikas, a consultant at Stockholm-based telecommunications consultancy AU-System. They could also make purchases by accessing Internet-based payment systems on their handheld computers. Hotel guests could more easily use equipment at a business center, such as printers, Kivikas added.
Meanwhile, the airports, hotels and other businesses that offer such services could become a new kind of service provider, the Local Wireless Operator or LWO, he said. Restaurants and hotels would be willing to offer the service as a courtesy to visitors, counting on the service as a draw to potential customers.
"I do believe Bluetooth will play a major part in the Internet access space," Kivikas said.
In an exclusive facility such as a frequent-flier lounge at an airport, Bluetooth could even allow for low-cost voice calls. Rather than requiring customers to make calls from fixed-line phone or rack up long-distance charges on their own cell phones, the airline could give them special rates on calls from Bluetooth handsets. The wireless LAN would link the callers to the airline's own network connection.
Although IEEE 802.11b wireless LANs already offer higher speed and let users roam from one access point to another, only a small percentage of people who visit an airport or restaurant are likely to have that wireless-LAN capability on a PC or other device, Red-M's Gawne said.
By contrast, Bluetooth transceivers are being integrated into a wide range of devices already, and its relatively low cost and low power requirement makes it more attractive to both users and operators, Gawne said.
Strio Inc. this month will outfit a multistory office building in Atlanta, the Greater Atlanta Small Business Project (GRASP), with Red-M Bluetooth access points. GRASP is an incubator of small businesses, including retail stores. Using the Bluetooth LANs and Strio applications, retail companies in the building will be able to easily share information with customers among their own employees without either needing to log on.
Cerulic Inc. has contracts to begin early next year deploying Bluetooth access points in airports. The networks eventually may be able to alert fliers on their handheld devices that a flight is boarding, Gawne said. InnTechnology Inc. demonstrated at the Venetian Resort-Hotel-Casino in Las Vegas, during the Comdex trade show last month, a system in which customers could check in, get directions to their rooms and order hotel services via a Bluetooth handheld device.
However, some analysts are skeptical that businesses will invest in such services and that Bluetooth will be the best technology for the public LANs.
"What's the fun of wireless access that only works at the airport or the mall?" said Galen Schreck, an analyst at Forrester Research Inc., in Cambridge, Massachusetts. Most people who need mobile Internet access will take advantage of services such as Ricochet or OmniSky for full-time access, Schreck said. Moreover, the business model of investing heavily in wireless LANs as a draw to customers is questionable, and if the providers billed users they would face significant complications, Schreck said.
Bob O'Donnell, at market research firm International Data Corp., in Mountain View, California, believes wireless access points have potential but said Bluetooth faces hurdles as a technology for providing the service. Wireless access points using 802.11b technology are faster and have greater range, and the momentum of the market is driving that technology into smaller and less expensive devices, he said. O'Donnell also has doubts about the business side of providing such access points.
"It's a great concept, but until there's a critical mass (of wireless-enabled devices), they don't make a lot of sense," O'Donnell said.
The Gartner Group predicts that by the second half of 2001, 20 percent of mobile devices will be equipped with Bluetooth transceivers, but Gartner analyst Marina Mayes said in an e-mail interview last week that IEEE 802.11 LANs will become the dominant wireless technology in public spaces such as airports and hotels. Because of conflicts between the two technologies, both of which use the same radio spectrum, IEEE 802.11 may pre-empt Bluetooth in these facilities, Mayes said. Vendors still are working out ways around this conflict, which in some tests has been shown to reduce network performance.