Ericsson Discontinues Bluetooth Development
By Eric Lin, Thu Sep 02 03:15:00 GMT 2004

Ericsson was the company that first invented Bluetooth, now it's the first company to cease developing and manufacturing Bluetooth chips.

Ericsson is not cutting Bluetooth support and development altogether, however it will not create any new hardware, or even new intellectual property, based on the Bluetooth protocol. Ericsson will move its existing development and support staff into the Mobile Platforms unit, which designs and manufactures chipsets and reference platforms for handsets.

This move shows that Ericsson still believes there is a place in the mobile phone for Bluetooth, however it feels that maintaining a separate design and semiconductor unit is not a profitable long-term business decision. This does not mean Ericsson thinks that Bluetooth is dead, simply that it is mature enough that it has become mainstream. Once a product reaches mainstream adoption, production typically shifts to high volume, low margin manufacturers. Now that the Bluetooth spec is stable and fast, development will be incremental at best. Since that was Ericsson's strength, it is ceding the market to players who are stronger at volume rather than innovation.

Analysts and reporters have spent the last three years predicting Bluetooths demise, no matter how many chipsets were shipped or devices were sold. It's no surprise then that some are declaring Ericsson's withdrawl as the beginning of the end for Bluetooth. But now that Bluetooth is genuinely popular, there is too large an installed base of users for Bluetooth to just disappear from the wireless scene. Its installed base is high enough that it's not going away anytime soon, Over time some or all of Bluetooth's functions may be taken over by newer protocols -- ZigBee, UWB, NFC, and other acronyms we haven't even heard of yet -- but Bluetooth still has quite a few years of life left in it.