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Issue #2003 - 20 (June 2003)
(Updated June 30, 2003)


Wi-Fi versus Bluetooth - Forrester Opines Against the Conventional Wisdom - Our Take

Source: Forrester and 80211.Com report

Forrester: Money Being Poured into WLAN is Wasted
Forrester analysts believe that it's only a matter of time before the world of wireless Internet experiences a hot spot crash. The company states that in the future there will not be enough devices to utilize all the WLAN's that are being established by mobile operators. The price offerings that are being established are not appealing to those that would use the service and therefore, Forrester predicts that by 2008 there will only be 53 million Wi-Fi-enabled devices, such as laptops and PDAs in use. Analysts continue by stating that out of the 53 million, only 7.7 million users of the Wi-Fi enabled devices will pay the price to connect to a hot spot. Forrester senior analyst, Lars Godell says, "We believe that much of the money being poured into public WLAN today to enable access from places as diverse as bars, marinas, hotels and airports as well as train, bus and metro stations is being wasted." (Source: CNet News.com) - more info

Bluetooth to offer competition to 802.11?
A recent Forrester Research report asserts that Bluetooth will take away market share from 802.11 and become the dominant wireless technology. Notwithstanding the failure so far of Bluetooth to establish itself as a must-need technology, as well as the growing popularity of 802.11, Forrester brings numbers to support its argument that it's not at all a foregone conclusion that 802.11 will win the battle for dominance in wireless communication. 

Forrester says that about 40 million Bluetooth-enabled phones have shipped worldwide. More than 2,000 companies are currently developing more than 1,000 Bluetooth-based products (and this number includes only those companies which are registered with the Bluetooth SIG). By comparison, more than 25 million WLAN-enabled devices have been shipped worldwide, and the Wi-Fi Alliance has approved 741 products for interoperability. 

Forrester estimates that by 2008 there will be 286.5 million Bluetooth-enabled phones, PDAs, and notebooks in Europe alone -- this in addition to the millions of wireless headsets, keyboards, mice, webcams, and other devices that will also use Bluetooth. About 77 percent of phones, 60 percent of PDAs, and 67 percent of notebooks will have Bluetooth built in. The trend toward incorporating Bluetooth into products will increase as more Bluetooth-802.11 combo chips become available and their prices drop. The number of 802.11-based devices will reach 53.4 million. Eighty percent of notebooks shipping in 2008 will be Wi-Fi-enabled, but only 34 percent of PDAs will, and only 2 percent of cell phones. Twenty-seven percent of PDAs and 65 percent of notebooks will offer a combination of both technologies. Only 1 percent of notebooks will offer only Bluetooth, but 33 percent of PDAs will do so, as will 75 percent of cell phones.

Forrester states - When we add all these numbers up, it becomes clear that Bluetooth devices will outnumber 802.11-based units by a ratio of five to one. If we measures quantities only, this means that Bluetooth, not 802.11, will be the dominant wireless technology. 

Tony Smith of the Register is not persuaded by Forrester's conclusions: Bluetooth's lead in 2008 will come about solely because Bluetooth is included in phones -- 239 million out of 286.5 million units. This leaves a mere 47.5 million Bluetooth-enabled PDAs and notebooks. Only 2 percent of phones will support 802.11 and Bluetooth (none will offer 802.11 alone); this means that of the 53.4 million WLAN-enabled devices shipping in 2008, 47.2 million will be PDAs and notebooks. So, if phones are taken out of the equation, WLAN and Bluetooth are practically even. The vast majority of PDAs and notebooks will offer both technologies, so both will become equally pervasive. - read more about Bluetooth and 802.11 in Tony Smith's analysis; on the fortunes of Bluetooth more generally, see Darrell Dunn's report; see also Eric Griffith's story about the Agere, CSR joint Bluetooth/Wi-Fi module; and Tom Krazit's story about a new TI Bluetooth/802.11 combo chip (and TI's release on the issue); see also Kevin Poulsen's report about new Bluetooth security concerns; and Ben Charny's report of a Qualcomm-Broadcom Bluetooth collaboration. At this week's Bluetooth World Congress in Amsterdam, Sony showed a new technology, dubbed Feel, which allows Bluetooth devices to connect instantaneously (it works like Apple's Rendezvous). The software sits on top of the standard Bluetooth protocol stack to provide a better user experience. Sony said the technology would allow devices to detect and connect to each other immediately and begin transferring data.

Source: Forrester and 80211.Com report

MobileInfo Comments and Advisory: We respect Forrester as a research company with depth. Unfortunately, like Tony Smith of register and a few others, we do not agree with all the conclusions made by Forrester. It appears that Forrester analyst got overwhelmed by the Bluetooth numbers against lower Wi-Fi deployments in  predominantly PDA and notebook-based devices. We offer the following points for technical professionals to consider:

  1. There is no practical contest between Bluetooth and Wi-Fi. Both Bluetooth and Wi-Fi have their own unique roles in the world of wireless -  Bluetooth is for the lower-end and cheaper voice-centric devices (primarily handsets) - low-power, low battery consumption, shorter coverage distances, cheaper chip costs and lower communications speed. This serves handsets and a whole lot of other accessories very well. Wi-Fi is the bigger brother of Bluetooth - stronger, muscular who eats more battery power, runs faster and costs more money. It is better suited for those devices that are data-intensive.
  2. If we just count numbers, Bluetooth already does and will continue to dominate in numbers. No arguments, there. If that is Forrester's definition of pervasive, so be it. Wi-Fi should not be in a counting contest with Bluetooth. Let it concede that. WE shall have no arguments with Forrester if the report said - In terms of cellular handsets, Bluetooth will be more pervasive than Wi-Fi.
  3. When smart phone handsets become more data-centric doing some heavy-duty applications, vendors will have to consider Wi-Fi for these devices. Major device vendors are already doing that, including Qualcomm at the chip level.  We see more dual-technology devices in future at the high end of the device spectrum i.e. incorporating both Bluetooth and Wi-Fi. 
  4. Both technologies will survive for the foreseeable future. Numbers will be in Bluetooth's favor - wireless data horsepower will be in Wi-Fi's favour.
  5. In the home networking arena, Wi-Fi has a much greater chance pf succeeding than Bluetooth. 
  6. In fact, ignoring future technology developments and breakthroughs that we do not know about, we see high-end wireless data-centric devices in future to support three network technologies Bluetooth for communication to accessories, Wi-Fi for hotspot/enterprise connectivity and 3G or 4G for pervasive mobility when data needs are less intensive. Our forecasts are not based on any numbers but fundamental strengths (and weaknesses) of individual technologies.
  7. Future hotspots should and we think, will support both Wi-Fi and Bluetooth devices. Next generation of Access Points or WLAN switches will support Bluetooth devices as well.

Do you comments on our advisory ? Send us an e-mail.

Note: This news release may contain forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of Securities Exchange act of 1934 in USA. Similar provisions exist in other countries. There is no assurance that the stipulated plans of vendors will be implemented. MobileInfo does not warrant the authenticity of the information. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.

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