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Technology Stocks : Bluetooth: from RF semiconductors to softw. applications

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To: Mats Ericsson who started this subject4/6/2001 9:57:06 AM
From: Dennis Roth   of 322
 
MS pullout draws Bluetooth's teeth
Richard Shim
individual.com

Bluetooth, the wireless technology that is
supposed to connect cell phones, handheld
computers and other devices in a personal-area
network, remains all bark and no bite.

Microsoft will not add support for Bluetooth to its
next version of the Windows operating system, XP.
The company is one of the lead members of the
trade group that is developing the Bluetooth
standard.

The lack of support from the Redmond,
Wash.-based software giant isn't fatal, but it will
likely slow the technology's once strong
momentum. Without Microsoft, Bluetooth adoption
becomes slightly more onerous for hardware
manufacturers and software developers as the
software giant won't deliver a family of device
drivers or other software to simplify how the
technology gets incorporated.

The main problem? The Bluetooth juggernaut never
materialized. "Production-quality hardware and
software for Bluetooth isn't available," said a
Microsoft representative. "Including Bluetooth
support in Windows XP wouldn't deliver the type of
experience Microsoft wants to deliver to
customers."

Microsoft announced it would provide hardware
and software support for Bluetooth by the first half
of 2001 if production-level Bluetooth hardware and
software was available.

"If anything, this move by Microsoft is a wake-up
call to the Bluetooth folks that they need to get their
products out there," Gartner analyst Chris LeTocq
said.

Wireless networking alternatives, such as 802.11b,
have also caught the industry's fancy. Both
technologies allow consumers to wirelessly tap into
standard networks. The infrastructure for 802.11b,
however, is much further along. NEC and other
notebook makers, for example, will release
802.11b-enabled notebooks later this Spring.

Microsoft has announced it will support 802.11x in
Windows XP.

The Bluetooth reversal came as a surprise to
some industry insiders. "With the kind of support
from manufacturers and developers that Bluetooth
has, I'm surprised that Microsoft would leave
Bluetooth out," said Ken Hyers, research analyst at
Cahners In-Stat Group.

"Any reasonable followers of Bluetooth would agree
that the first half of this year was pretty early to
expect anything from Bluetooth," Hyers added,
saying the end of the year is a more likely time
frame for products to be available.

LeTocq said that Microsoft can still add Bluetooth
support with a relatively easy upgrade.

Missing targets

Bluetooth has been a high-tech buzzword for
about two years, but it hasn't lived up to
expectations. Last month, at the CeBit trade show
in Hanover, Germany, show organizers tried to
create the largest Bluetooth network allowing
visitors to connect to a data network
wirelessly--but the experiment failed.

With Bluetooth, consumers create their own
wireless networks, allowing devices such as
personal digital assistants, cell phones and PCs to
exchange information. Transmission speeds can
reach up to 720Kbps within the 2.4GHz band--the
same band as 802.11b, also known as Wi-Fi.

Although Bluetooth and 802.11b complement each
other in several ways, the two standards also
compete because consumers will likely use them
for the same function. With Bluetooth, data from a
notebook would be sent by an internal Bluetooth
radio chip to a cell phone.

Under 802.11b, data is transmitted directly to an
802.11b receiver, which would be wired into an
Ethernet network. To work, 802.11b requires that
the user be inside or near a structure containing a
transmitter.

While some thought this could be an impediment,
airports, hotels and office buildings are rapidly
installing 802.11b transmitters. Notebook
manufacturers are also opting to install 802.11b
transmitters over Bluetooth transmitters. The
802.11b standard defines transfers rates of
11Mbps in the 2.4GHz radio band.

Another factor in its favor is that 802.11b depends
upon the same networking protocols and
standards as traditional networking, so adaptation
should be fairly easy.

Research firm Allied Business Intelligence
estimates that manufacturers will ship 1.4 billion
Bluetooth products in 2005, which is considerably
more than its 20.2 million estimate for Wi-Fi
shipments. However, Wi-Fi has the advantage
now, with products based on its technology already
shipping.

Other big-name manufacturers in the Bluetooth
standard group include Ericsson, IBM, Intel, Nokia,
Toshiba, 3Com, Lucent Technologies, Motorola,
Compaq Computer and Dell Computer. In total,
there are about 2,000 companies in the group.

Bluetooth borrows its name from the 10th century
Viking King Harald Bluetooth, who united Nordic
nations under one religion.

Staff writer Ian Fried contributed to this report.
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