June 3, 2005

Bluetooth Wireless Tech Starts to Show Some Bite

After a decade of empty chatter, the short-range wireless technology known as Bluetooth is finally getting some bite.

Many of the niche vendors at this year's Computex, the world's second largest computer show, were displaying Bluetooth -- named after a Danish king who united Norway and Denmark in the 10th century -- versions of their wares this week in Taipei.

They are joining a growing number of top industry players, like peripherals makers Logitech and BenQ, and cellphone makers Nokia and Motorola, in adding the colorful technology to their lineups.

Despite many enthusiastic boosters, Bluetooth has been slow to take off due to a lack of standardisation in its early days and the absence of any "killer applications" that could take advantage of its clarity, high bandwidth and ability to transmit through walls.

But rising standardisation has helped to ease the growing pains. A number of applications have given the technology new momentum in the last year, most notably wireless headsets used in conjunction with music players and cellphones.

As the trend catches on, sales of Bluetooth chips have grown sharply, with 264 million expected to sell this year -- more than three times the 69 million for 2003, according to Industrial Economics & Knowledge Center (IEK), a Taiwan research group.

As the technology has matured, average prices have dropped to an estimated $3.80 per chip from $6.40 over the same period, according to IEK data.

"This year our Bluetooth sales will probably be up several times over last year," said Kelly Wang, assistant manager of business development for In-Tech Electronics, one of the many companies displaying Bluetooth products at Computex.

"It's definitely growing very fast.


In-Tech's Bluetooth products on display included wireless headsets for music players, as well as external speakers that can be positioned at a distance from a Bluetooth-enabled hi-fi or PC.

The company also had a Bluetooth hands-free device for mobile phone use in the car, along with "dongles" -- the simple adapters that fit into a universal serial buses (USB) on the back of a PC that act as an add-on receiver for Bluetooth signals.

Across the aisle from In-Tech, T-Pro International Co. Ltd. racked up sales of about 15,000 dongles in the first quarter, with its Bluetooth devices selling to U.S. retailer CompUSA and attracting interest at the show from the Sharper Image chain of stores, said international sales director Andrew Huang.

In addition to dongles, T-Pro also offers Bluetooth light pointers that allow for wireless scrolling across computer screens, as well as more common wireless speakers and headsets.

"There's been a lot interest," said Huang. "We've had interest from 20 to 30 customers at the show."

Bluetooth was slow to catch on after its roll-out in 1994 due to high prices, said Jay Marsden, technical marketing engineer at ATI Technologies, a top maker of PC graphic chips whose biggest fans include gaming enthusiasts.

"Bluetooth peripherals on the PC market are pretty limited right now for gaming," he said.

The absence of a killer application has also kept the technology from developing faster, said Brian Ma, an analyst at International Data Corp.

"The search is for the main application beyond the headsets, along with making sure it's as easy to use as possible," he said.