Page Two

By Mark Hachman  |  Posted 2003-12-10 Print this article Print

Wireless headsets are making headway as well. David A. Hogan, vice president of carrier sales at Jabra Corp. of Frankfurt, Ill., said that in the U.S. the ratio of wired headsets to Bluetooth headsets sold has improved from 4:1 to 2:1 over the past few years. In Japan and Europe, sales of non-Bluetooth headsets are virtually nil, he said. Analysts studies have shown that consumers will pay significant premiums to eliminate clutter, especially on the desktop. But to truly take off, Bluetooth headsets have to become a smaller percentage of that overall cost, said Michael Sharer, OEM sales manager at Fellowes Manufacturing Co. of Itasca, Ill., wandering the show floor in search of contacts.
"As companies put more technology into phones, it will drive the price up," Sharer said. "But paying $100 for a headset is not going to be something people who buy these cheap, refurbished phones are going to do. Its like saying, OK, youre going to buy a $400 PC as well as a $400 Klipsch speaker system? Thats as much as the PC. That doesnt happen."
Fortunately for proponents of the technology, PC makers seem to have quickly latched on to Bluetooth. By 2007, 36 percent of all notebook PCs will be equipped with Bluetooth, according to analyst Ken Furer of International Data Corp., based in Framingham, Mass. In addition, Robert Graham, brand manager at Toshiba Ltd.s digital products division, in Irvine, Calif., said Bluetooth was being implemented in worldwide models of PDAs and notebooks, with the emphasis on Japanese models. Bluetooth is also being implemented across IBMs ThinkPad notebooks worldwide, added Howard Dulaney, market segment manager for wireless strategies within IBMs PC division in Armonk, N.Y. "We are seeing increased what I would call traction, where we see different amounts of sales in different geographies, but seeing more overall," Dulaney said, including demand for Bluetooth-equipped printers. However, The Zelos Groups McAteer noted that there still is no standardized printer file for Windows, adding to the technologys interoperability woes. Bluetooth is also being added to automobiles, such as Toyotas Prius hybrid car. Close to 40 percent of American Prius buyers order the Bluetooth option, according to Paul Daverio, marketing manger for advance technology vehicles at Toyota Motor Sales U.S.A. Inc., in Torrance, Calif. Toyota plans to offer Bluetooth in four models, including two vehicles in its Lexus line. Part of the reason for Bluetooths success has been the steadily decreasing component costs, which have resulted in a shakeout in the industry. For example, longtime attendees of the expo noted that Microtune Inc. was absent, after the company decided to shop its Bluetooth business in October. In addition, Oki Semiconductor Ltd. and Koninklijke Philips Electronics NV were also no-shows. The competition will also help next year to lower the expected bill-of-materials costs for Bluetooth radios to under $3.45 in volume shipments, IDCs Furer said. Chip makers also face some additional challenges, such as the problems of shrinking stubborn analog components, and whether or not to add boutique components such as a DSP for improved audio quality, said Jennifer Bray, a consultant for Cambridge Silicon Radio, based in Cambridge, U.K. All other issues aside, the Bluetooth SIGs McCamon said the economy will also play a critical role in Bluetooths development. "The next 24 months will be make or break for Bluetooth," he said. If the economy doesnt recover, the industry will be "in a pretty tight spot," he said.


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