The two technologies won't compete—they'll play different roles, go into different devices, and arrive at different times, according to a new report by Forrester.

by ISP-Planet Staff [October 23, 2001]

Contrary to popular belief, Forrester Research B.V. argues that both Bluetooth and WLAN technologies will succeed in Europe.

Lars Godell, Forrester Analyst, said Bluetooth devices will outnumber WLANs by 10-to-1 in 2006 with 235 million Bluetooth-enabled mobile phones, PDAs, and laptops in use, versus 22 million WLAN-enabled devices.

"Forrester sees the two technologies as more complementary than replacements for each other," Godell said. "WLAN will beat Bluetooth on reach, bandwidth, and support for PC LAN communication standards. Its strengths will make it the uncontested winner for laptops to connect to private or public networks, and it will dominate public Internet access hotspots like hotels and airports. It will steadily power into laptops, reaching more than 10 percent next year and 72 percent by 2006, as corporate deployments drive demand and laptop vendors struggle to keep up with one another," Godell added.

In contrast, Bluetooth will go everywhere else, becoming the preferred choice for mobile phones, PDAs, and consumer gadgets, and winning on cost, power consumption, and support for real-time applications like voice.

Telco warning
Forrest Research indicates that by 2006, Bluetooth will be present in 73 percent of phones and 44 percent of PDAs. It will rule device-to-device communication, enabling seamless communication between phones, printers, PDAs, and scanners in the office and between phones, smart home control units, TVs, and VCRs in the home, as well as delivering powerful vertical solutions. Bluetooth will see a bigger installed base of devices as early as next year due to its inclusion in phones—annual shipment volumes of phones and consumer gadgets are more than 100 times greater than for laptops. Bluetooth will flood into mainstream mobile phones in 2003 when chip prices fall to $5 per unit.

Godell warned that European telcos must wake up now and embrace both technologies to defuse competitive threats, generate more network traffic, and drive sales.

"With a few Nordic exceptions, Europe's telcos haven't moved out of the trial mode with WLAN services—and Bluetooth isn't even on their radar screens," Godell said. "Telcos must wake up—WLAN and Bluetooth carry a range of opportunities that can defend telco revenue streams and reduce competitive threats."

To protect their GPRS and UMTS business cases, mobile operators must take part in the hotspot land grab now, before the most attractive hotspot locations and most lucrative business customers have been taken by competitors like MVNOs and wireless ISPs (WISPs).

Godell said instead of seeing WLAN as a threat to be lobbied against, mobile operators should view it as a unique opportunity for learning about data services now and for differentiation later.

—End