Ericsson Pulls Bluetooth
LM Ericsson (Nasdaq: ERICY) -- 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 Ericsson’s 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