Bluetooth Showing Solid Growth In 2002, With Improving Longer Term Prospects, According To Allied Business Intelligence Report.

Business Editors & High-Tech Writers

OYSTER BAY, N.Y.--(BUSINESS WIRE)--Aug. 15, 2002

Bluetooth has survived its baptism by fire and appears poised to fulfill much of its considerable potential, evidenced by steady market growth in 2002.

Allied Business Intelligence (ABI) projects Bluetooth chipset shipments to increase to 33.8 million in 2002, up from 11.2 million in 2001. In the longer run the Bluetooth semiconductor market is forecast to grow to just over 1.1 billion chipsets by 2007, with associated revenues of $2.54 billion.

In retrospect many of the problems encountered in 2001 were those that ABI had cautioned about. Probably the single biggest issue with the Bluetooth story was hype. However, the hype in the Bluetooth space has largely been replaced by a far more pragmatic perspective, with an understanding of the technology's limitations. Other problems have also been alleviated. The Bluetooth 1.1 specification is fairly stable, interoperability issues are far fewer, and aggressively priced chipsets are available from several vendors.

"Given the commitment of the mobile handset vendors to Bluetooth we expect cell phones to account for approximately two-thirds of the projected 27.8 million Bluetooth devices that will ship in 2002," said Navin Sabharwal, Director of Residential & Networking Technologies and report author. "However, 2003 should see volume shipments ramping up across a number of other market segments. This will serve to create more diverse and compelling usage scenarios for consumers, and will result in significant network effects."

The ABI report "Bluetooth - The Global Outlook for Bluetooth Component and Equipment Markets" examines the evolution of Bluetooth technology, analyzes potential overlap with other wireless technologies, forecasts the IC market and segments Bluetooth device shipments into 15 categories. While mobile handsets are set to dominate the Bluetooth device market the report notes that other key Bluetooth device categories will include cordless headsets, computing devices and the automotive market.

On the component side the availability of sub-$5 Bluetooth chipsets (and eventually complete solutions) will be aided by increased IP licensing and RF-only solutions that obviate the need for a dedicated Bluetooth baseband. The fierce competition in the Bluetooth IC market, and the resulting innovation, will serve as a key market catalyst. With major semiconductor houses determined to have a stake in the Bluetooth market the competitive landscape will be subject to critical changes impacting the inevitable industry shakeout.

Allied Business Intelligence Inc is an Oyster Bay, NY-based technology research think tank that publishes research and technology intelligence on the wireless, broadband, electronics, networking and energy industries. Details can be found at www.alliedworld.com or by calling 516-624-3113.