Delays & Disappointments

If you believe everything you read, you might think Bluetooth is dead.

Although the short-range wireless technology has suffered some public disappointments — the Microsoft exclusion and the CeBIT fizzle, for example — industry insiders say 2.5G and 3G data services will be incomplete without Bluetooth functionality.

Prompted by a variety of technical and market-related issues that have slowed the technology's progress, most analysts have downgraded previous forecasts and pushed back Bluetooth's coming-out party to 2002.

Consultant group Pittiglio, Rabin, Todd & McGrath (PRTM; www.prtm.com) said Bluetooth faces several challenges. End users will be concerned about data security during wireless-data transfers. Initial high prices may stall adoption. Bluetooth products aren't fully interoperable. Also, interference with other radio technologies may restrain its growth.

“Despite these teething problems, the technology remains fundamentally an excellent concept, with more and more digital and mobile communications devices entering the everyday lives of the world population,” said Michael Wall, Frost & Sullivan (www.frost.com) wireless research analyst, in a recent market study.

But many developers are waiting to see how early products take off before investing significant money into developing new Bluetooth applications. Despite the support of more than 2,500 members of the Bluetooth Special Interest Group (SIG; www.bluetooth.org) and billions of dollars invested in the technology, most carriers remain unconvinced.

As one U.S. carrier said: “We're looking at it, we're waiting, but we're not putting all of our eggs in that basket.”

Although most early products are not fully functional and don't comply to the 1.1 Bluetooth specification, they provide a basis from which manufacturers can upgrade. To date, almost 150 products have been qualified to the 1.1 specification.

However, interoperability, interference and security issues still loom as large obstacles to Bluetooth's widespread adoption.

“There is still a little bit of freedom among standards,” agreed Roger Wery, PRTM partner. “That's problematic; you need standards that are interchangeable so you can use an IBM printer with a Toshiba laptop.”

At the recent Bluetooth UnPlug-Fest, hosted by ETSI (www.etsi.org), interoperability and interference weren't problems. According to Thomas Will, technical chairman of the Bluetooth SIG's UnPlugFest steering committee, there were “more than 100 Bluetooth platforms operating in a confined space at the same time, and no interference problems whatsoever.”

Because its transceiver operates at 2.4GHz, Bluetooth may interfere with everything from microwave ovens to garage-door openers. To avoid this problem, it employs spread-spectrum frequency hopping. The transceiver uses several random frequencies within a 79MHz range, changing from one to another 1,600 times every second. It's unlikely that any two devices within range of each other would operate on the same frequency at the same time. This doesn't mean Blue-tooth can't interfere with other radio technologies.

Lars Nilsson, Ericsson manager (www.ericsson.com) of strategic marketing, said there are no interoper-ability or interference issues when you combine Bluetooth with next-generation networks, but he said wireless LAN (WLAN) network technologies are more susceptible to interference.

Bluetooth also interferes with other WLAN technologies such as home RF and 802.11.

“There are studies that have shown Bluetooth can conflict with 802.11,” said Peter Phillips, Socket Communications (www.socket.com) director of product marketing. “Interference in the 802.11 space, in terms of data speeds, really only occurs when you're talking about something in a 3-foot radius of an 802.11 hub.”

Security poses another problem for the short-range technology. Today, many carriers are concerned that transmitting data, such as credit-card numbers for m-commerce, will not be secure when transmitted wirelessly via Bluetooth.

Wery said Bluetooth and WLAN have a basic wireless equivalent privacy (WEP) protocol that can be turned on to offer basic security encryption capability.

“It's potentially problematic to transmit data,” he said. “You need to make sure the WEP is not turned off, and you can run a virtual private network (VPN) with a device, and the VPN security itself is much more robust.”

Most analysts say carriers should view Bluetooth and next-generation wireless networks as complementary technologies that will increase service and minutes.

“Next-generation 3G networks give cellular phones a much better and higher-performance data capability, which is exactly what Bluetooth needs,” said Dave Suvak, Extended Systems (www.extendedsystems.com) CTO.

Skip Bryan, Ericsson Mobile Phone and Terminals director of technology market development, said he believes the convergence of WAP and Blue-tooth technology within devices could drive the wireless Internet, mostly in the m-commerce space.

But an increasing number of analysts believe that unlicensed, short-range technologies that can deliver 3G levels of bandwidth, data and VoIP connections at a lower cost could compete with 3G technologies.

In a recent report, Andersen predicted (www.andersen.com) that Bluetooth will provide an alternative for wireless within small geographical areas, which could make 3G redundant in some places. Whether Bluetooth actually will threaten 3G will depend on bandwidth availability, cost of usage and quality and relevancy of services and applications, according to the consultant group.

The report also said short-range wireless particularly will be suited to transactions, advertising and other location-specific events, and in these situations, merchants and consumers will find it cheaper to use Bluetooth instead of 3G. Even if Bluetooth reduces the proportion of advertising, transaction and machine-to-machine applications running over wireless networks by only 20%, it said the reduction in revenues for carriers “will be significant — over $8 billion in 2010 using current forecasts.”

However, a recent Ovum report said Bluetooth still lacks an adequate management layer to its architecture that can support service management and security in the way that 3G infrastructure can (www.ovum.com).

According to PRTM's Wery, carriers may consider other wireless access technologies to work with technologies such as WAN 3G. Here WLAN (802.11) technology may play a complementary role by enabling faster access and connection speed, but only in targeted areas such as hotels, airports and malls.

Perhaps instead of stealing 3G traffic, Bluetooth will add traffic for carriers, which may want to consider combining 3G and Bluetooth.

Ericsson has partnered with Telenor Mobile (www.tmc.telenor.com) to develop a platform for delivering data-intensive services to wireless devices via Bluetooth or WLAN while also offering seamless connectivity with wider GSM, GPRS or 3G networks.

Ingvild Myhre, Telenor managing director, said in a press release that carriers can benefit from adding a WLAN-type platform to a UMTS core network because the combination creates a more valuable service portfolio.

Bluetooth may enhance the usability of a device, but carriers can rest assured it won't be a substitute for 3G to access the wireless Internet. Bluetooth lacks the speed and the advantage compared to other technologies.

“Bluetooth was really designed to be a cord cutter for handsets and headsets for mobile wireless. It was designed to be a simple, virtually narrow band,” Wery said.

Regardless of what Bluetooth might or might not do in the future, most carriers have yet to warm up to the technology, and many fear it, Suvak said.

“If they can figure out a way to tie the handsets, using Bluetooth, through to their network, then they can see how to make money,” he said.

Most carriers need more convincing, and soon.

According to one: “There's a feeling that Bluetooth better get its act together quickly. If it doesn't come together quickly, something else might take its place.”

Although 802.11 seems to be one up on Bluetooth so far, more wireless developers are including Bluetooth in their plans, according to Evans Associate's “Summer 2001 Wireless Developer Survey,” a survey of wireless developers' efforts worldwide (www.evansassoc.com).

According to Jay Dixit, Evans Associate wireless analyst, study respondents said they were working with Bluetooth currently (14.2%), evaluating Bluetooth currently (22.5%) or will evaluate the technology's potential for upcoming projects (32.3%).

This compares favorably to the number of developers currently working with 802.11 (18.8%), evaluating 802.11 (14.6%) or planning to look at 802.11 in the future (26.4%).