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Bluetooth: Catching up to the hype

Awareness is increasing, but lack of product availability hampers usage levels

A recent survey of Cahners In-Stat Group's panel of wireless Internet users revealed fairly high familiarity with Bluetooth technology; however, plans for purchasing Bluetooth products were not nearly as significant.

The survey of more than 200, mostly U.S.-based, wireless Internet users representing a wide range of company sizes, industries and technical expertise showed 75 percent had at least heard of the term Bluetooth and had a general idea about what it was. Only 26 percent of respondents, however, plan to purchase a Bluetooth-enabled product in the next 12 months.

Bluetooth is a specification for a small-form factor, low-cost radio solution providing links between mobile computers, mobile phones and other portable handheld devices, and Internet connectivity.

The low interest in actually implementing Bluetooth systems likely is a result of the relatively short supply of Bluetooth-based products. Although there was a significant amount of hype over these products initially, not as many of them are on the market today as had been originally planned. The Bluetooth Special Interest Group, however, recently announced that it has been qualifying, on average, a new Bluetooth wireless product each day during the third quarter and that a number of these products are now commercially available in Europe, Asia and the United States. According to BSIG, the total number of qualified products is now more than 350. This information seems to foretell the swell of products that will appear on the market within the next six to 12 months.

Half of respondents said that they have in fact seen Bluetooth products for sale, either on the Internet, in retail stores or from a wireless operator. Today, users must seek out these products on the Internet due to their relative scarcity and lack of availability in retail stores. Relying on "pull" demand for these products further fuels the lack of usage. Only 13 percent of wireless Internet panelists actually have used a Bluetooth device, and of those, only 42 percent own one.

Although it is too soon to draw conclusions from a small user population, initial products gaining traction include mobile phones and headsets, notebook PC cards and modem access points. According to the BSIG, nearly half of the 108 new products qualified last quarter included mobile phone, computing and other consumer electronics products. The remainder of the products that qualified during the quarter included chips, software and development tools from which equipment manufacturers can build their own Bluetooth wireless products.

When given a list of capabilities that Bluetooth technology can enable, wireless Internet users did not see any as a "killer," must-have requirement. It was most important to them, however, to have cordless connectivity between many devices such as between a notebook PC, desktop PC, or PDA and a cell phone, headset, printer or local phone line. Thirty-six percent of respondents said this was extremely important. A nearly equal percentage of respondents found it important to have the ability to access the Internet while on personal or business travel (airports, trains/subway stations), or at conference centers, restaurants, hotels and shopping malls. A multitude of real estate projects have started installing Bluetooth "hot spot" access points in hotels, shopping malls, golf courses, airports, retail stores, conference centers, enterprises and more.

Panelists viewed the ability to wirelessly obtain information about the location a user is in, such as airports, train/subway stations, conference centers, hotels, zoos, golf courses and shopping malls as less important. Only 17 percent of respondents thought it was extremely important. Users found the least value in being able to access the Internet in their home. The lack of importance placed on this feature probably is due to the fact that most people who want Internet access in their home already have some solution for it–either wireline or wireless.

Despite the development delays and the economic problems this year, In-Stat still believes this budding market will shine. Shipments of Bluetooth chipsets are progressing nicely in spite of the economic turmoil and are on track with In-Stat's forecast to exceed 12 million in 2001. The market for Bluetooth-enabled products is emerging, but it will likely require another six to 12 months to catch up with the hype.

Rebecca Diercks is director of wireless research at Cahners In-Stat Group.