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

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To: Mats Ericsson who started this subject4/27/2001 11:21:27 AM
From: Dennis Roth   of 322
 
Bluetooth Battles Bad News
individual.com

April 27, 2001
Mary Behr

Bluetooth, the wireless technology for short-range
radio links among mobile PCs, mobile phones,
PDAs, and other devices such as keyboards,
joysticks, desktops, and fax machines, hit some
serious snags in the past month. Most notable was
the news from Microsoft that Windows XP would
not ship with support for Bluetooth. Some analysts
reacted with surprise, considering that the software
giant is one of the leaders in the Bluetooth Special
Interest Group. Given that nothing happens without
Microsoft's blessing, the move, they said, sounded
the death knell for the standard. Yet other analysts
called the decision a good idea, since the standard
is not ready for primetime.

More ominous for the standard is the failure of the
technology in a demonstration at the CeBIT
computer and technology show in Hannover,
Germany late last month. The largest Bluetooth
network ever was set up so attendees could
download event information, but the experiment
failed when the many devices trying to connect
generated too much interference. So where does
this leave the fledgling standard?

Not Afraid of Commitment

Microsoft cites lack of production-ready hardware
and software as one reason for not supporting the
standard in XP. "Bluetooth will not ship in XP. That
does not mean that we have changed our
commitment to Bluetooth. We are committed to it,
and we expect support when we have a sufficient
number of hardware devices to test," says
Windows Product Manager Tom Laemmel.

Rob Enderle, Research Fellow at Giga Information
Group, wasn't put off by Microsoft's decision. "They
won't drop anything into a major OS that's not solid,
and Bluetooth is not solid. They can always add
things later because they have an in-place update
methodology to drop things into the OS. And
manufacturers can provide it as part of the
hardware they sell. Until the spec is finalized,
Microsoft would be foolish to add it to the OS," he
says.

But Enderle does see the CeBIT debacle as a big
problem for the standard. "There's no question that
Bluetooth blew up badly at CeBIT. It failed in a
spectacular fashion that added six months to a
year to the rollout. And some people are saying
that it put the rollout at risk."

Designed as a low-cost wireless solution,
Bluetooth is turning out to be more costly than
expected. "As if these setbacks were not enough,
chip prices are still at least four times higher than
the price point at which it becomes economical to
embed Bluetooth into low-cost devices, and there
are increasing numbers of reports of serious
interference between Bluetooth devices and IEEE
802.11b wireless local area networks (LANs),"
says Stan Schatt, Vice President and Research
Leader at Giga.

Can It Fly Without Microsoft?

So what does all this mean for consumers?
Microsoft is still behind Bluetooth but needs the
hardware to test the standard. "We need devices
of the same type from several different vendor, and
we need several categories of devices," says
Laemmel.

The looming question is whether hardware
companies will stay committed to the standard
without support in XP. Some analysts are not so
sure. "Few computing standards fly without
Microsoft's blessing. Without proper operating
system support, emerging standards like USB and
IrDA languished for years with no sign of life. Soon
after full USB support was baked into Windows, the
standard took off, while the neglected IRDA
standard still hangs in limbo," says Galen Schreck
of Forrester Research.

Not every wireless gadget needs Windows XP, so
some Bluetooth gadgets are slated to show up this
year. "The one thing that's working well is headsets
for phones. You'll see a lot of those this year," says
Enderle. Microsoft left Bluetooth support in the
Pocket PC platform because Bluetooth headsets
should be a hot item. Ericsson currently sells
mobile phones and headsets that connect via
Bluetooth.

"The different platforms have different audiences
and requirements," explains Enderle. "The
requirement is much greater in the handheld and
cell phone market, and the risk is much higher in
the desktop market."
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