Ericsson Pulls Bluetooth
08.31.04
LM Ericsson (Nasdaq: ERICY - message board) -- the company that
invented Bluetooth -- has announced that it plans to stop making
new chips using the short-range wireless technology.
Ericsson posted an announcement about the move on its Website,
saying that: "Even though large volumes are manufactured, the
business case for Ericssons design of new Bluetooth solutions is
not strong enough."
The Swedish vendor says that is forming a new unit to support
existing Bluetooth silicon customers and that its mobile units will
continue to offer Bluetooth software.
Other vendors, such as IOgear Inc., have announced that they will
continue Bluetooth development.
But the prognosis for the standard doesn't look so hot, now that
one of its major backers has essentially pulled the plug.
"It's not gone yet, but it is not going to make it long-term," says
Craig Mathias, principal at the analyst and consultancy firm,
Farpoint Group.
"Ericsson made a business decision -- a good one," he
chuckles.
Ericsson started developing its concept of a wireless "cable
replacement" back in 1994, which eventually led to the formation of
the Bluetooth Special Interest Group (SIG) in 1998.
But the struggling standard was plagued by interoperability and
pricing issues before it hit the market, leading many commentators
to predict its demise even before you could find Bluetooth products
in the stores (see Bluetooth 2 Postponed?).
A stable version of the standard -- version 1.1 -- was established
in 2001. Both the Asian and European markets have seen some takeup
of the standard.
However, the U.S. never warmed to the technology, and the
burgeoning market for 802.11 wireless LAN home networking has
largely overshadowed Bluetooth (see Bluetooth Stateside?).
But in the end, Mathias feels, Bluetooth has been victim of its own
hype, which saw the simple cable replacement technology get taken
up into fancy concepts like the personal mobile gateway (PMG) idea
(see Meet the Acronym Hunter).
"They set user expectations way too high," he says. "Bluetooth was
the marketing department running wild."
Dan Jones, Site Editor, Unstrung
