Broadcom gets sweet on Bluetooth

The BCM2033 is a single chip that runs on Bluetooth technology, which allows wireless devices such as handheld computers, mobile phones and even laptops to communicate with each other within a distance of about 30 feet.

Broadcom previously offered technology that required two chips to perform similar functions of the 2033. The Irvine, Calif.-based company consolidated the functions into one chip to reduce the amount of required space on the circuit board as well as the costs to equipment makers.

In the past, most Bluetooth-enabled devices required a processor to power a computer or phone and a second chip to handle the Bluetooth wireless networking technology. By offering a single chip that handles both duties, device manufacturers can save costs and reduce device power consumption, therefore increasing battery life. This sort of integration is a trend in the chip industry as the markets grow more competitive and manufacturers look for ways to differentiate their products and reduce costs.

Broadcom joins other chipmakers, including Silicon Wave and Cambridge Silicon Radio, which also make single-chip Bluetooth products. Other large semiconductor makers such as Lucent Technologies, Infineon, Agere and RF Micro Devices also are seeking to carve a place in the Bluetooth market.

But some industry observers believe that Bluetooth devices still have a long way to go before gaining a presence in the mass consumer market.

"It's going to be a big market...the question is when," said Gartner Vice President Ken Dulaney.

Some analysts believe cost will play a major role in how fast Bluetooth devices get off the ground.

"People have been attacking the market with a two-chip solution, and Bluetooth price targets are extremely aggressive," said Scott Bibuad, Broadcom's director of marketing for Bluetooth products.

Dulaney says that equipment makers want the cost for the Bluetooth technology to sink to about $5 for each device, but he estimates that the cost is now roughly between $20 and $30.

There are also other concerns, namely in the market for cell phones and handhelds.

"There is so much turmoil in the handheld market itself," said Sarah Kim, an analyst at The Yankee Group who said that major players like Palm have cut forecasts and prices.

The mobile phone industry has its own issues, Kim said. Bluetooth will be incorporated into some next-generation technology phones, known as 2.5G or 3G, but those phones are slow in coming.

"The handset vendors have pushed back the availability of next-generation phones, therefore pushing back the availability of Bluetooth," she said.

Broadcom's Bibuad acknowledges the delays and that the arrival of Bluetooth has not met peoples' expectations so far. However, he remains optimistic and says that the company's new Bluetooth chip will go into mass production by September, in time for the holidays.

"This Christmas will be a blue Christmas," he said.