Bluetooth semiconductor market making solid progress - Market Intelligence

Mobile Internet, The, August, 2003

The Bluetooth semiconductor market has made solid progress in spite of economic ups and downs, reports In-Stat/MDR. The high-tech market research firm reports that final 2002 worldwide chipset shipments were 35.8 million units, resulting in 245 percent growth over 2001. As this market's size grows and matures, the growth rates will naturally decrease, resulting in a Compound Annual Growth Rate (CAGR) of 74 percent from 2002 to 2007.

Mobile handsets, led by GSM, will remain a major driving force for Bluetooth. Bluetooth-enabled mobile phones have grown significantly, especially for embedded models. When the worldwide average cost for Bluetooth solutions dipped below $10, many more models entered the market offering Bluetooth connectivity. With the assumption that cost will prevent a complete conversion for all phones to Bluetooth in the near term, In-Stat/MDR believes that the uptake rate will significantly rise as the solution cost declines.

In-Stat/MDR's research shows that there are many European and Asian operators who see Personal Mobile Gateways (PMGs) as an opportunity to increase Average Revenue Per Unit (ARPU) that offer other means for service differentiation. Demand for PMG products and associated capabilities and services could provide another driver for Bluetooth-enabled products. PMG adds an application layer on top of the Bluetooth physical connection and existing profiles. Several PMG equipment models are expected by the end of 2003, as well as thin, or sleek, accessory devices. In-Stat/MDR also expects to see some trials and increased investigation by several European and Asian operators to occur this year and in 2004.

In-Stat/MDR has also found that:

--PDA manufacturers have greatly increased their Bluetooth activity, with a number of product introductions and a marketing push.

--Bluetooth silicon revenue will rise to $1.7 billion in 2007.

--The vast majority of chipset shipments in 2002 were up to the HCI (Host Controller Interface) only; however, that will migrate slowly toward solutions that include all of the embedded upper stack elements.

--Although Europe is presently the leader in terms of design decisions, it is no longer the leader in Bluetooth chipset shipments to that region for manufacturing. With an increase in expected production of headsets, notebook PCs, consumer products, and mobile phones in Japan, Korea, Taiwan, and China, Europe's share of shipments will erode.

The report, "Bluetooth 2003: Are PMGs Another Driver?," covers Bluetooth equipment and technology, looking at Bluetooth chips and Bluetooth equipment being made and marketed, along with a myriad of applications and where they are headed. In-Stat/MDR forecasts manufactured Bluetooth-enabled equipment by detailed application, in addition to semiconductor shipments by detailed application. The forecast for radio, baseband, and host-supported silicon solutions is presented, as well as semiconductor shipments by HIC breakout, geographic region shipments, geographic design wins, shipments by Class 1 vs. Class 2/3, and application segmentations for Class 1. All forecasts are through 2007. This year, new detailed segmentations for mobile phones by air interface, access points, and consumer have been added. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/Ccatalogue.asp?ID=161 or contact Erin McKeighan at 480-609-4551; emckeighan@reedbusiness.com. The report is priced at $3,995.00 U.S. dollars.