Bluetooth shipments start to take off

Analysts projected that chipset shipments of Bluetooth, the short-range radio technology for connecting PCs, consumer gadgets and peripherals, will push above 5 million this year, with some estimates topping 13 million units. While the numbers are a fraction of what Bluetooth is eventually expected to achieve, analysts said they show the technology is on track to becoming ubiquitous.

Micrologic, with the most conservative estimate, projected that Bluetooth chipset shipments will come near to 5 million this year. IMS estimated unit shipments at 10 million, while Cahners projected 13.4 million.

The Bluetooth industry has come under attack for promising more than it can deliver, but these latest figures indicate that the promises are about to be met. The technology was inaugurated several years ago amid great fanfare by mobile phone companies like Nokia and Ericsson, but its arrival as a mass-market product was delayed several times by difficulties in implementing a complicated standard. In the second half of this year, though, Bluetooth has appeared either built-in or as an add-on for mobile phones, laptops, headsets, handheld computers and other devices.

"This is the beginning of a substantial ramp up, with all kinds of products adopting Bluetooth," said Alan Woolhouse, vice president of communications for Cambridge Silicon Radio, which designs Bluetooth chips.

Woolhouse noted that Bluetooth chipsets are already outselling more expensive wireless LAN (WLAN) chipsets, despite wireless LAN's growing popularity and the fact that has been shipping in volume since 1997. WLAN has been pitched as a competitor to Bluetooth, but CSR said the figures demonstrate that the two technologies serve different purposes. "Bluetooth is much smaller, lower-cost and has lower power consumption. It is more efficient for an ad hoc connection, but isn't ideal for a wireless network in an office. It is primarily for cell phones, wireless Internet gateways and PDAs," he said.

Bluetooth may be just entering mass-production territory, but it is expected to ultimately ship in the billions. "We see Bluetooth chipset unit growth from 524,000 in 2000 to 13.4 million this year, versus our April 2001 forecast of 13.6 million," said Joyce Putscher, principal Bluetooth analyst for Cahners In-Stat Group, in a statement. "That will result in Bluetooth chipsets overtaking 802.11x shipments of all flavors by almost a factor of two. This is a dramatic comparison to the flat 802.11b shipments this year. We expect a compound annual growth rate of over 300 percent in sales of Bluetooth chipsets over the next 5 years."

Micrologic predicts 45 million Bluetooth chipsets will be sold in 2002, increasing to 181 million in 2003 and hitting 1.2 billion in 2005. vCSR's Woolhouse said that Bluetooth has overcome its initial problems with incompatibility and can give users real benefits. "GSM was regarded as extremely late, and Microsoft initially decided not to support USB," he said. "These kinds of things take some time to reach critical mass."