Bluetooth trailblazer CSR (Cambridge Silicon Radio) has announced the next phase of its single-chip Bluetooth strategy that sends a "come and get it" message to the wireless world. Its new products, tailored for devices such as handsets and audio products such as headsets, will be available before the end of this year and should be in high-street stores during the second half of 2003 (see CSR Intros Bluetooth Chips).

And next on the agenda, founder and marketing director Glenn Collinson tells Unstrung, is a 5GHz product that will be unveiled in 2003. Its current products are designed for 2.4GHz spectrum.

So what's new from CSR, currently nestling in seventh spot in Unstrung's top 25 privately-funded wireless firms (see Unstrung's Top 25 Startups). Well, its new BlueCore2-ROM and BlueCore2-Audio chips are notable for adding "host" memory to the radio and baseband elements, as well as bringing the price per unit down to about $5 and reducing the size by about half compared with its current chips, making them easier to fit into ever-shrinking end-user devices. In addition, the onboard memory allows the chips to be tailored for the products that will house them, housing different combinations of application software for the various types of mobile phones, PDAs, headset units, and so on.

The firm's CEO, John Hodgson, says the low price is largely due to CSR owning its IP -- "We have no license fees to pay. It's important that you don't waste any money when producing Bluetooth products."

Collinson adds that the next generation will be even cheaper, as this latest advancement of adding technology to the CMOS (Complementary metal oxide semiconductor) "brings Moore's Law to the wireless industry."

Switching from the offensive [Ed. note: Was he swearing, or what?] to the defensive, Collinson also attacks the "misinformation that Bluetooth is a low-bandwidth technology. That's not right. You can get streaming video using Bluetooth," he says, adding that upcoming advancements will see the technology able to deliver data transmission speeds of up to 3 Mbit/s or 4 Mbit/s, compared with the current 1 Mbit/s.

Both Hodgson and Collinson disputed that the Bluetooth market has been overhyped, quoting figures from research firm Intex Management Services Ltd. (IMS) that 7 million Bluetooth units were shipped in 2001. This would increase to more than 500 million by 2006, with mobile phones accounting for a lot of the Bluetooth-enabled devices. Not that current Bluetooth wafers haven't already made an impression -- "Every single Bluetooth-enabled PDA shipping in volume now includes a CSR chip," claims Hodgson.

Bluetooth is the technology that is helping PDAs to become proper e-mail devices, he adds, by linking the handhelds to a mobile WAN via a GPRS mobile phone. Such usage will be a revenue driver for the mobile operators, he adds.

They also dismiss the idea that wireless LAN technology will see off Bluetooth as a short-range technology. "The personal area network, communicating between personal devices, is Bluetooth's strength, while 802.11 will be the choice in offices and at hotspots. They are complementary," says the marketing man.

Collinson is much more excited by the opportunities in telematics. "With embedded voice recognition technology, hands-free Bluetooth devices will be a core technology in cars in the next 10 years," he states, with Audi AG already planning an in-car solution that uses CSR technology.

He believes that it will not be long before Bluetooth is built into many top-range cars from the likes of DaimlerChrysler and Ford Motor Company as well as Audi, moving from there into mid-range vehicles. "That will stimulate the accessory markets too." That would be a pattern that CSR has already seen in the adoption of its chips in mobile handsets and PCs. "We are in one or two top of the range models [Sony Corp. and NEC Corp. (Nasdaq: NIPNY)], but will see much more mid-range adoption in the coming year, and in PCs our products will appear not only in laptops but in desktops too." This will help drive revenues, he says, and the firm expects a healthy increase on its $17 million revenues in 2001 ($4 million in 2000). In addition, Microsoft Corp. (Nasdaq: MSFT) is to use CSR chips in its wireless mouse and keyboard products.

Although admitting that cutting a deal with the likes of Nokia Corp. (NYSE: NOK) will be essential if it is to really crack the mobile handset sector, Collinson will not be drawn on likely specific deals, just that "we are talking to all the major manufacturers and hope to make some announcements soon."

Is there any danger that competitors such as Infineon Technologies AG (NYSE/Frankfurt: IFX) or Broadcom Corp. (Nasdaq: BRCM) might steal its thunder? "It's true that others are now bringing out single-chip Bluetooth products, but they are behind us in the maturity of their products -- it takes time to iron out the wrinkles," states Hodgson.

And what of the 5GHz development? "That will be our product launch for 2003. It will allow applications like high-quality video, but doubling the frequency brings up many barriers and interference factors. It's a huge step," states Collinson. "But it's basically the same technology that we have now, so we can perform some of the same tricks."

CSR looks to be well-placed to take advantage of increasing demand for additional wireless capabilities and applications. Of the Bluetooth 1.1 specification qualified products available at September 1 this year CSR accounted for 57 percent, with no other vendor making double figures.

And there's a growing pot of revenue to play for. IDC believes the market for Bluetooth chips will grow from a value of $77 million in 2001 to as much as $2.6 billion by 2006 as the technology becomes deployed in greater numbers of consumer products.

Not only does CSR have a technology headstart, but it has a branding advantage too, it seems. IMS analyst Matthew Towers says research in 2002 shows that CSR has the highest recognition factor of any Bluetooth chip vendor, with 80 percent of respondents in an IMS survey naming the company as one of the first three firms that comes to mind as a supplier of Bluetooth circuits or modules.

— Ray Le Maistre, European Editor, Unstrung
www.unstrung.com