Bluetooth deployment lags behind predictions

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By Matthew Hamblen

(IDG) -- The advent of Bluetooth products is getting pretty long in the tooth.

The short-distance wireless technology called Bluetooth was unveiled several years ago, and products first emerged at the fall Comdex show in 1999. But interest in the technology's ability to help users eliminate annoying cables connecting cell phones, handhelds and other personal devices to printers and other machines hasn't helped it catch on yet.

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Analysts have described the delay as a classic problem of a good technology that hasn't found its market, mainly because early Bluetooth chips and products remain expensive. And some analysts cited lingering concerns that Bluetooth devices might interfere with 802.11b wireless networks, though vendors have said that fear is overblown.

At the recent Bluetooth Congress 2001 in Monte Carlo, Monaco, Palm Inc. announced a postage-stamp-size Palm Bluetooth card to allow wireless communications between Palm m500 and m505 handhelds and other Bluetooth-enabled devices up to 30 feet apart.

The Palm device will sell for about $150 when it ships by year's end, according to Santa Clara, California-based Palm. Some internally wired Bluetooth laptops and PCMCIA Bluetooth cards are already available. But most of the add-ons will cost an additional $100 to $150, analysts said.

"Who's going to pay $150 for a Bluetooth card when it's not that inconvenient to pay much less and use a cord?" said Peter Firstbrook, an analyst at Meta Group Inc. in Stamford, Connecticut.

Users and vendors selling Bluetooth-equipped devices face another quandary: What good is it to have a technology few people are using? "It's like the only guy who has a cell phone; so who is he going to call?" Firstbrook said.

As a result of the still-high price of chips, which cost manufacturers anywhere from $27 to $50, Meta Group has revised its projections for when Bluetooth will be widely in use. In 1999, Meta Group said ubiquitous usage would arrive in 2002. Now it says that won't happen until 2004. And for that to happen, chips need to drop to $5 apiece, or a big vendor needs to make Bluetooth a loss leader.

Alan Reiter, an analyst at Wireless Internet and Mobile Computing in Chevy Chase, Maryland, said he agrees that Bluetooth "is at least two years late" and that chips were supposed to cost $5 by now.

Despite its slow start, Bluetooth technology has won wide praise from analysts, and it has been part of the reason why Stamford, Connecticut-based Gartner Inc. foresees an era of the personal-area network, where personal devices will easily communicate with those around them.

There are 2,500 vendors signed up to develop or deploy the technology, although application development can be complex and equipping old printers and other devices can be expensive, analysts said.