April 20, 2002
By Karen Peterson
Bluetooth may be slow to hit the shelves, but behind the scenes, the technology is moving ahead rapidly.
That's the word from Frost & Sullivan, which in a report released this week painted a rosy picture for the future of the short-range wireless technology.
The most "hotly contested" Bluetooth segment, according to the consulting and marketing firm, is the semiconductor market which last year began moving into second-generation solutions with developers also ramping up for volume production.
The result was "fiercer competitive forces driving strong performance," a trend that Frost & Sullivan says will continue to spur consolidation.
Frost & Sullivan projects that consolidation will lead to the emergence of " no more than 10 key players" in the sector.
Although the "major advancements" came from small and medium-sized semiconductor developers, such as Ericsson Microelectronics and Cambridge Silicon Radio, the Frost & Sullivan report notes that larger companies, including Texas Instruments and Infineon, "are now beginning to have a major impact on the competitive environment."
The Frost & Sullivan report projects that chipset shipments will rise from 9.23 million in 2001 to over 971 million chipsets per annum in 2006.
The consulting and marketing firm said its "extremely optimistic outlook" for the Bluetooth semiconductor market is related to the "inroads" made during 2001, including smaller footprints, lower chip counts and improved power consumption.
Also driving the Bluetooth success story: advances in single-chip RF technology, a solution that is geared toward the cellular phone market.
"Although this type of solution requires further technological development, said Michael Wall, Industry Analyst at Frost & Sullivan, "it has the potential to further drive down development and integration costs. This trend resulted in individual RF chip shipments being slightly higher than individual baseband shipments in 2001."
While it says that the cellular phone market will remain the largest channel for the next five years, the Frost & Sullivan report also notes the value of "cutting-edge applications" that are attracting attention from semiconductor developers.
Among the applications garnering increased Bluetooth attention: "human interface" devices, such as keyboard, mouse, games controllers, and desktop peripherals, including printers and digital cameras.
"All are perceived as potential high volume areas for market development," according to the report, which adds that "improvements in the robustness of chipsets to conditions such as heat and light is allowing further investigation in automotive and industrial environments."
A thriving environment of supporting products and services has emerged around the main semiconductor market, with design services, protocol software vendors and intellectual property developers all making major contributions to the growth of the market.
