Jan 1, 2000 12:00 PM,

Promises With No Strings Attached

Chuck Holt

By year's end, Bluetooth will mean more to consumers than just a grape-soda smile. That's what backers promise, and judging by the recent flurry of Bluetooth announcements and demos, along with new support from household names such as Microsoft and 3Com, Bluetooth forecasts appear more convincing.

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Analysts believe that there's a huge market for the 2.45GHz technology, which lets laptops, handsets and myriad other devices communicate with one another. Cahner's In-Stat, for example, forecasts more than 670 million Bluetooth-enabled devices by 2005, when Allied Business Intelligence says sales will eclipse $2 billion.

But a few hurdles remain. For example, the 2.45GHz band already is home to other devices that are potential interference sources, and the FCC might allow even more users into that band. Another is the maximum usable distance between Bluetooth devices. Most estimates range between 6.45 feet and 26.2 feet, although some of the 1,200 members of the Bluetooth Special Interest Group (SIG) claim that the range will be much greater. TDK announced at Comdex that it's developing connections with a range greater than a football field.

Then there's the fact that the 1,200 companies are competitors, whose delicate alliance could fall apart as margins shrink. Although Bluetooth initially will add about $20 to the retail price, backers say that will fall to $5 in a few years.

Those hurdles haven't dissuaded investors, however.

"We're very excited about Bluetooth if nothing else just as convenience for users," said J. Michael Gallipo, Monument Telecommunications Fund portfolio manager. "But it's also going to be useful as a networking technology in terms of syncing your laptop and your desktop computer: no more cables (or) docking stations."

Gallipo said Bluetooth will play a large role in making ubiquitous the Internet and communications in general.

"I think that's highlighting the gradual de-emphasis of the PC platform and the emergence of everything else," in the consumer-electronic realm, he said.