Bluetooth revenues will reach $333b by 2006 - report

July 12, 2001

Despite the delayed debut of products, Bluetooth-enabled devices will be a runaway success, according to a new end-user survey by marketing consultancy Frost & Sullivan.

The growth potential for the emerging short-range wireless technology will defy critics currently "baulking" at its prospects, says the consultancy.

Frost & Sullivan expects that Bluetooth anticipation "sweeping" the global PC and cellular phone industry will help push revenues to US$333 billion by 2006 from just under $2 billion in 2001. Bluetooth shipments will leap to 1.01 billion from 4.2 million during the same timeframe. The technology will take Europe in particular by storm, says the consultancy, making it by far the most profitable market for vendors to target first.

The survey found that awareness, understanding and likelihood to purchase all score higher in Europe than in the U.S. or Asia.

Frost & Sullivan conducted interviews with over 120 IT network managers and executives with IT or network equipment purchasing responsibilities, across Europe, Asia and the U.S. The results show that end-users are, in principle, willing to embrace Bluetooth technology. However, a certain degree of confusion and caution prevails.

"One of the fundamental findings of the study is that the majority of end-users describe Bluetooth as a wireless LAN," said Jan Ten Sythoff, programme manager at Frost & Sullivan. "Although this is true to a degree, the two technologies also differ in many ways. It is important that the industry increases awareness of the capabilities and limitations of the technology, or disappointment could lead to a backlash," he warned.

Frost & Sullivan observes that the high-profile glitches plaguing 3G services and the disappointment surrounding the release of WAP technology have resulted in a particularly cautious approach across the industry.

It warns that Bluetooth, as a new wireless technology, also has the potential to be hyped up.

"Bluetooth should be sold on an application-by-application basis, and not launched in a huge fanfare of publicity," stressed Ten Sythoff. "If and when it becomes ubiquitous it will be revolutionary, but this will take several years."

Firstly, Bluetooth technology must overcome teething problems such as interoperability, robustness, interference and perceived security flaws, says the consultancy.

The survey highlighted that IT network managers are mostly concerned about security issues, a finding which was consistent, irrespective of region, company size or whether the company has installed a wireless LAN or not.

Of the 120 respondents, only three were testing Bluetooth products and all were based in Europe. However, standard version 1.1 has finally been ratified, which has so far represented a major obstacle to product rollout. Already, more than 100 products have been qualified to this specification.


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