The Differentiation Divide

Bluetooth shot into the communication community with a bang and has quickly become one of the industry's most coveted technologies. In fact, the official Bluetooth Web site claims that there are now more than 1,900 members in the Bluetooth Special Interest Group (SIG).

Of those 1,900 member companies, a good portion are involved with de-veloping chip solutions for the OEM design community. With so many chip players trying to capture market share in the Bluetooth space, questions are already beginning to arise about how Bluetooth chip manufacturers will distinguish themselves from their competitors. Specifically, how will OEMs be able to compare and contrast one Bluetooth solution to another?

Frankly, there's not much differentiation arising in the Bluetooth chip area right now. The push now is simply to make Bluetooth a reality. Chip manufacturers are working around the clock just to turn out Bluetooth solutions. Right now, product differentiation is a secondary priority.

This leaves OEMs with a flood of Bluetooth solutions that are almost identical. Yes, we'll see some chips offer a bit more integration, and, yes, a few will be lower cost. But based on my conversations with Bluetooth chip developers, there will initially be no drastic differences between the chips. This is a product selection nightmare for people who spend their lives comparing and contrasting chip functionality, process technology, integration levels, and more.

I can't downplay the need for basic Bluetooth chip solutions at this point. Today's OEMs need Bluetooth chips, so differentiation is not the highest priority on their mind. But, at some point, Bluetooth will be a mainstream technology, and differentiation will be a key element to success.

Will chip manufacturers offer Bluetooth solutions that allow system designers to differentiate their products from other OEM developers? Will chip manufacturers deliver solutions that deliver higher levels of integration, better power performance capabilities, or exciting new process technologies? After speaking with Bluetooth chip manufacturers recently, I'm not sold that true product differentiation will occur at the Blue-tooth chip level in the near future. And that could eventually slow down the overall development and acceptance of Bluetooth-enabled systems.

There's no question in my mind that Bluetooth will be big. But, without product differentiation, Bluetooth will become a commodity item in the communication market that will offer lower and lower profits to manufacturers. The best way to solve this dilemma is by making one Bluetooth system stand out from the rest. To do this, system designers need innovative and distinct Bluetooth chip solutions. Hopefully, chip manufacturers will step up to the challenge.

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