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

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To: Mats Ericsson who started this subject6/1/2001 7:27:50 AM
From: Dennis Roth  Read Replies (2) of 322
 
Fast Wireless Web Is Here, But Not on a Cellphone
dailynews.yahoo.com

By Lucas van Grinsven

LONDON (Reuters) - While the world's mobile phone companies run trials on costly third-generation mobile phone services, consumers and businesses are discovering that the high-speed, mobile Internet already exists -- and it's free.

Wireless LAN and Bluetooth, two alternative wireless access technologies, use the 2.4 gigahertz radio frequency band, which is freely available around the world.

Compare that with the $100 billion mobile operators in Europe have forked out for radio spectrum for third generation cellphones.

Despite that price tag, third generation cellphones will offer lower bandwidth than Wireless LAN or Bluetooth.

Third-generation phones, which are scheduled to reach the mass market by 2003, could have download speeds of around 100 kilobits per second, twice that of an ordinary telephone modem, but often slower if many callers roam in the same area.

Granted, third generation mobile phones can be used anywhere, while wireless LAN and Bluetooth networks cover only small areas of around a hundred meters, but overlapping networks can easily cover a city.

Wireless LAN and Bluetooth, which can be used in devices as diverse as computers, cellphones and doorlatches, are seven to ten times faster than 3G. Industry groups are working hard on specifications to boost the speed by another ten times and increase the coverage area to several hundred meters per aerial.

In the United States, where the communications industry has not bet its shirt on new cellphone technology, Wireless LAN, often referred to as Wi-Fi, is spreading like wildfire.

Companies use the technology to get rid of the cables in their offices, and hotels and airports view it as an attractive service for customers who will be able to download their email and surf the Web on their laptops from anywhere in a building.

Colleges and campuses hand out portable computers with Wi-Fi cards to their students; Microsoft's headquarters in Redmond, Washington, have been partly unwired; and coffee chain Starbucks announced to offer Wireless LAN in its shops.

``There's definitely a sentiment in the U.S. that third generation is a risky bet and Wireless LAN isn't,'' said telecoms analyst Nigel Deighton at research group Gartner Dataquest.

COMPUTER INDUSTRY VERSUS THE TELECOMS WORLD

A factor that helps boost Wireless LAN in the U.S., where computers are the preferred way to access the Internet, is that it was developed within the computer industry. Mobile-phone-centric Europe has focused on handset technology to develop new ways to access the Internet.

Even in Europe the new wireless technologies are making inroads. Airports in Finland and London are installing Wireless LAN networks.

Bluetooth, homegrown in Europe, was developed by researchers at Sweden's mobile phone equipment maker
Ericsson (news - web sites) who were looking for a way to extend the functionality of a mobile phone.

Initially designed as a wireless connection between a handheld computer and a cellphone, or between a headset and a cellphone, there is no reason why Bluetooth cannot hook up portable computers to a fast Internet office network.

In theory it is even possible to route a call on a cellphone via Bluetooth onto the fixed line telephone network in an office, bypassing the expensive wireless network

The advantage of Bluetooth over Wireless LAN is that the chips are cheap, they use less power, and Bluetooth does not need a base radio station because every device can create a local network.

Bluetooth chips currently sell for $30 or more, but dozens of chip companies, like Philips and closely held Cambridge Silicon Radio, are working on $5 Bluetooth chips, and prices and sizes will keep falling, the industry says.

It should not take too long before hotel guests with a reservation will automatically check in when they enter the lobby and their Bluetooth phone will unlock their room, general manager Linus Lundberg of U.S.-based Axis Communications predicted earlier this year.

SNAGS

But there are snags.

First, the first Wireless LAN standard, known as 802.11b, and Bluetooth do not like each other, because they operate in the same radio spectrum and cause interference.

One will have to give, and it looks like a new Wireless LAN standard, known as 802.11a, will move up to the 5.2 gigahertz radio frequency spectrum. Unfortunately, the two standards can't communicate with each other, and the new radio band is not available worldwide.

Another problem is that Wireless LAN is ideal for the timber-frame homes in the U.S., but the signals have difficulty penetrating thick stone structures often found in Europe.

Security and privacy issues have not been solved either, because, for example, the encryption standard agreed under 802.11b is too weak for many users. Those who need greater security can have individual solutions tailored to their requirements, but then it ceases to be a universal standard.

``Security in Wireless LAN is pretty shaky. You really need 128-bit encryption, but that means you'll leave the industry standard and get stuck with one vendor,'' said Deighton.

Having a vendor-specific Wireless LAN network means a person can only access identical wireless networks, which will make it impossible to hook up to other 802.11b networks, which come in dozens of flavors.

It could take three to four years before the Wireless LAN industry has solved these standards problems and consumers can hook up through a patchwork of overlapping Wireless LANs, said analyst Falk Mueller Veerse at Durlacher Research.

``Until then, Wireless LAN will only work in specific offices and not outside them,'' he said.

``You won't have worldwide Wireless LAN roaming any time soon,'' agrees telecom analyst Angela Dean at Morgan Stanley Dean Witter.

Bluetooth, despite teething problems highlighted in faltering trials at the March CeBit technology trade fair in Hanover, Germany, could have an edge because security is mostly solved, and there is one worldwide standard.

Many owners of hotspots such as airports and hotels wait to invest until it is clear which will get the upper hand.

``New network technology always suffers from security and manageability in the beginning, but most hotspot owners are holding their breath for Bluetooth,'' Deighton said.
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