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Every billboard, storefront display and ticket counter is aching to reach out and touch someone. That’s the idea behind Ericsson’s Bluetooth Local Infotainment Point, a small, rune-shaped Bluetooth-enabled hub that can communicate with Bluetooth devices operating within 10 meters.

The $499 BLIP, whose first version began shipping last month, is intended primarily to enhance advertising displays, touchscreen kiosks, scheduling displays and information booths. With 720 kilobits per second of bandwidth, it can also act as a gateway to Internet access and offer slick presentations including audio, animation and even video. However, few of the early Bluetooth devices-mostly cell phones and PDAs-can display much beyond text.

Tangled Up in Bluetooth

Although BLIP is similar to public wireless LANs based on the 802.11b standard, also known as Wi-Fi (see “Wireless LANs Go Public”), it targets standing rather than sitting customers-people pausing in a public space who want either to gain information or kill time before moving on.

“The first applications will probably cover special user groups, like visitors at museums, amusement parks, cruise ships and exhibitions,” says Per Jakobsson, vice president of business innovation at Ericsson.

BLIP includes two megabytes of random-access memory, two megabytes of flash memory, and an Ethernet connection for linking up to a server. Jakobsson says developers can start by posting simple WAP and Web-formatted data, but there’s also an open-software toolkit for creating more complex applications.

For example, BLIP stations could gather customer feedback, engage customers in trivia games or deliver coupons and multimedia marketing presentations. While Ericsson plans to sell its own applications, it’s not acting as an ISP, so users pay nothing for the services.

The initial version is limited to one Bluetooth customer at a time, but Jakobsson says a multipoint version that can communicate with up to seven simultaneous users will be out this fall. A version that can beam to devices up to 100 meters away should be available by year’s end, although users would still need to be within 10 meters for interactive applications.

Short-Range Competition

Previous efforts in short-range wireless interactive marketing have used the infrared ports available with most Palm and Pocket PC devices. For example, late last year, Streetbeam introduced infrared-based access points embedded in public-display ads. The infrared access points beam coupons, promotions, information and other content to PDA users.

Earlier this year, AdAlive introduced a somewhat similar service. More recently, Australia’s Bluefish Wireless launched the first infrared service to provide for on-the-spot transactions.

Infrared technology suffers, however, from its low bandwidth and its extremely short range-you must be within three feet of the beacon to sync up. What’s more, within a year or two, Bluetooth is likely to be embedded both in PDAs and cell phones, whereas infrared links are rare on cell phones. Not surprisingly, Bluefish plans to release a Bluetooth version of its product later this year, and other infrared providers are expected to follow suit once the Bluetooth market matures.

Working against Wi-Fi?

On the high end, BLIP faces competition from Wi-Fi. While the two wireless technologies were designed for different purposes (Bluetooth’s 10-meter technology is aimed at personal networking while Wi-Fi’s 100-meter network is a wireless replacement for Ethernet LANs), both BLIP and public Wi-Fi services are pursuing a third market: mobile broadband access. In this arena, there’s relatively little to recommend the short-range, low-bandwidth Bluetooth over the longer range, 11-megabit-per-second Wi-Fi except for its size advantage.

Some analysts question whether Bluetooth users will be using their new cell phones for broadband networking and on-the-fly Internet access. “Using Bluetooth as a wireless local-area network technology is a bit like trying to shove the ugly stepsister’s foot into the glass slipper,” says Dylan Brooks, an analyst with Jupiter Media Metrix.

In addition to range and bandwidth issues, Bluetooth interoperability is several years away. “One of the real advantages of Wi-Fi in public networks is its interoperability,” says Brooks. And many executives still travel with a laptop but without a handheld or Web-enabled phone. “There isn’t any push in the corporate space to outfit laptops with Bluetooth,” he adds.

Small, Cheap and Here

Bluetooth’s key advantages are the size and cost of the hardware a person must carry. It will be years before wireless LAN components can be reduced to a size and cost approaching Bluetooth’s, and even then, many question whether radio components can operate reliably in such small sizes.

With the laptop industry firmly wed to Wi-Fi and cell-phone vendors committed to Bluetooth, the battleground will be played out in the PDA market in between. Wi-Fi PC cards are already available for some PDAs, but Bluetooth has the edge here again due to size and cost.

Despite some recent setbacks, including Microsoft’s delaying software support for the standard, Bluetooth has gained significant industry support that could translate into some very big customer numbers.

Merrill Lynch’s widely touted estimate that 80 percent of new wireless devices will include Bluetooth connectivity by 2003 may be overly optimistic, but Bluetooth is still likely to be a large market, bigger than current projections for mobile Wi-Fi users. If so, Ericsson’s funny-looking Bluetooth runes may be more than just a blip on the horizon.

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