British Bluetooth network supplier Red-M got an early Easter egg on Thursday, in the form of $35m (£24m) in second-round venture-capital funding. The investment from Apax Partners Funds and Amadeus Capital Partners is designed to give Red-M an early boost in the Bluetooth market and see the company through to profitability.
Despite recent pronouncements that Bluetooth is mired in nearly impossible technical and production problems, Red-M and other companies are resolutely optimistic the wireless networking system is just going through early growing pains. Red-M vice president of marketing and business development Simon Gawne points out that Cambridge Silicon Radio recently shipped its one millionth Bluetooth chip and that Ericsson, Palm and other device makers are planning to sell Bluetooth-integrated products by the end of the year.
"This Christmas, any new mobile phone at the high end will come with Bluetooth," he said. "At that point, it shifts from a niche to the general consumer market."
Red-M makes access points and access servers for Bluetooth networks, which it sees being used in businesses, public places and in the home. It began shipping systems only in November, and is selling to organisations such as country clubs and hospitals.
But taking Bluetooth -- originally conceived as a cable-replacement technology for mobile phone accessories -- into the networking market poses problems. In businesses, some users say Bluetooth interferes with 802.11b wireless LANs, which are widely used in the US. In the home, Bluetooth can have trouble penetrating walls and floors -- it is designed for low-power mobile devices, and does not have the range of 802.11b.
Gawne says fears of 802.11b interference are overstated, and says that home systems can be adjusted to give an effective range of 30 meters. Bluetooth is also far cheaper than 802.11, and doesn't need configuring. "For the home, you're likely to find some die-hards who want to use 802.11b or Home RF, but for the majority of home applications, Bluetooth is more than sufficient," he said
One of the worse PR disasters for Bluetooth occurred at the recent CeBIT conference, where a high-profile demonstration involving location-based services failed. But Gawne notes that plenty of other Bluetooth demonstrations at CeBIT worked fine -- including Red-M's own. "One company took a gamble and it didn't pay off for them," he said.
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