Ericsson ends Bluetooth hardware development - a misunderstood move

Jeremy Green, Principal Analyst

Ericsson is to disband its Bluetooth subsidiary Ericsson Technology Licensing and stop developing Bluetooth hardware.

This move has been widely misunderstood as suggesting that the company does not see a future for the technology. In reality, Ericsson's decision reflects the success of Bluetooth, not its failure.

Announcing the decision, the company's VP of Marketing Johan Akkesson said that Bluetooth is now a mature technology with many semiconductor manufacturers making chips in large volumes. Bluetooth is now present in most mid-range mobile devices and in many consumer electronics devices and PC peripherals. Ericsson's cost base and business model is ill fitted to this kind of commoditised volume business.

The extension of the Bluetooth specification will mainly be about defining new 'profiles' - application environments and associated software. Therefore, Ericsson's assessment of the likely prospects for its technology development and licensing business seem sound to us.

Bluetooth's critics have been quick to suggest that Ericsson is abandoning Bluetooth because it recognises that other radio technologies, such as WiFi, Zigbee or UWB, are better. Perhaps they are, though the latter two are nowhere near Bluetooth's place on the maturity curve, and the former is not so kind to batteries and does not share spectrum so well. Most of the misery inflicted by Bluetooth on developers and users is to do with 'special' implementations of the specification in areas where the Bluetooth spec is silent. There is nothing to suggest that other radio access technologies will be better in this respect.

Rumours of the death of Bluetooth have been greatly exaggerated.

Jeremy is a Principal Analyst specialising in wireless. He can be contacted directly on jeremy.green@ovum.com.