Production Costs Bite Into Bluetooth Viability

PARIS (03/03/2000) - Bluetooth, originally conceived as a cheap, wireless way to link mobile phones to laptops, is finding new applications.

At the CeBIT show in Hanover this week, manufacturers demonstrated home Web terminals, mice, OCR (optical character recognition) wands, cameras, computers and PDAs (personal digital assistants), all linked together using the technology known as PAN (personal area networking).

Bluetooth operates in the unlicensed 2.4GHz ISM (industrial, scientific, medical) frequency band, and can connect together a maximum of eight devices on a shared 1M-bps (bit per second) radio channel over a range of up to 10 meters.

The radio protocol is designed to cope with a certain amount of interference, so it can coexist with Bluetooth-based devices used by other people nearby, or with other radio technologies using the same frequency band, such as 802.11 wireless LAN (local area network) systems.

The standard for this multitalented technology was developed by the Bluetooth SIG (special interest group) led by 3Com Corp., L.M. Ericsson Telephone Co., Intel Corp., IBM Corp., Lucent Technologies Inc., Microsoft Corp., Motorola Inc., Nokia Corp. and Toshiba Corp. Total membership is now over 1,585 companies.

The founders of the SIG set as two of its goals that Bluetooth would occupy only the bare minimum of space on a circuit board and consume almost no power -- both vital factors in the protocol's target market, the replacement of the cumbersome, proprietary and expensive cables and PC card devices used to connect laptops to mobile phones.

Most important, though, was the target cost: the protocol should add no more than US$5 to the bill of materials for a mass-market product, meaning that Bluetooth could be added to practically any consumer electronic device.

The price is at least moving in the right direction: from the $5,000 which one exhibitor paid for its prototype Bluetooth PC card this week, Intel expects the price to slip below $30 a piece when the chip vendor starts shipping repacked Ericsson chipsets to laptop motherboard manufacturers, an Intel spokesman at the show said.

But that $30 is still too expensive for most applications, some industry insiders say.

"Today, the cost point is too high to integrate in products," said Ronald Sperano, a program director with IBM's personal systems group. "Our philosophy is to let the market get a hold. ... The first market is for adaptors. We will Bluetooth-enable legacy devices."

When exactly the market will get a hold remains to be seen -- but the unit price is unlikely to dip below $10 for some time yet. Sanjay Bapat, a spokesperson for Bluetooth component developer and manufacturer Silicon Wave, said price is highly dependent on volume. "I would say it would drop below $10 per module next year," he added.

Price aside, the good news for those impatient to own some of the Bluetooth gadgets on show at CeBIT is that manufacturers are remarkably consistent when they talk of delivery dates. They tend to agree that finished products will available "by the end of the year."

The bad news, though, is that those were exactly the words the manufacturers used last year.

If actual products are thin on the ground, there is no shortage of ideas for the forms they might take or the uses to which they might be put.

For instance, Fuji showed a digital camera transmitting images to a mobile phone at the show. [See "Fuji, Nokia to Demo Image Transfers over Bluetooth," Feb. 14.] In a demonstration at CeBIT's Bluetooth Pavilion, Intel buzzed electronic business cards back and forth between two PCs containing prototype adaptors, the wires and a button-sized antenna dangling from the back of the cases.

Ericsson announced a handheld Web browsing device called the Screen Phone, which will use Bluetooth to link to a base station with a phone line or other WAN (wide area network) connection.

TDK Systems Europe Ltd. demonstrated Bluetooth PC Card adaptors, beaming images from a digital camera, first to one laptop and from there to yet another machine.

Not demonstrated, but announced at the show, was an authentication system allowing users to walk up to a PC and automatically log on using a Bluetooth-enabled security device. [See "First Access Joins Bluetooth Alliance," Feb. 22.]In the Bluetooth pavilion, IBM demonstrated a ThinkPad notebook controlled by a C-Mouse, a cordless pen-shaped device which not only moved the pointer on screen, but also scanned in typewritten text from brochures and business cards.

The company also had a prototype clip-on Bluetooth adaptor for its Workpad C3, a rebadged version of the Palm PDA.

One of the charming things about Palm PDA users is that they are always willing to show off their gadget's infrared capabilities by beaming you their business card.

At the CeBIT show in Hanover, the exception to this rule was the shy, retiring 3Com engineer demonstrating a prototype Palm device incorporating Bluetooth.

This was not out of any desire to promote radio technology over infrared, he said, but because he feared that distributing his contact details would provoke a deluge of e-mailed questions about the company's future plans for Bluetooth.

He would not divulge his name, nor even much of a clue as to how the company plans to use the new radio technology.

"We are not revealing specific products because there are some things we are doing that we think will be differentiators," he said. He did concede, though, that the antenna design for a Palm product incorporating Bluetooth was "pretty much complete," and that the company was "developing (its) own Bluetooth protocol stack" which manages the sending and reception of data according to the Bluetooth specification, 3Com may well be dealing from two decks here, as Extended Systems Inc. said in a statement that its embedded Bluetooth protocol stack has been ported to the Palm operating system, and that 3Com has licensed its short-range wireless technology for use in its Palm Inc. devices.

Mobile phone ownership is rising rapidly, and manufacturers are coming up with ever more ideas for devices which can be Bluetooth-enabled to talk to those phones: the potential demand for Bluetooth bandwidth, even in the relatively confined area of a crowded office, is enormous.

In addition, there is also talk of a second generation of Bluetooth radio devices with 10 times the range of today's prototypes, before the first generation of products is even fully on the market.

Can the meager 1M-bps shared radio channel cope with all this potential traffic?

Of course it can, said one CeBIT exhibitor -- provided that people use the radio channel sensibly, as a personal area networking technology, and don't expect to run their corporate LAN traffic over it. There are other technologies better suited to that, the exhibitor added.

On a neighboring stand, a Bluetooth LAN access point took pride of place. If these are on the market in time for one to land in your Christmas stocking this year, please, use it sensibly.

The Bluetooth SIG can be found on the Web at

(Additional reporting by Terho Uimonen and Martyn Williams.)

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