Ericsson Ends Bluetooth Hardware Development

As a repeated Bluetooth booster, I would be dishonest not to discuss the story of Ericsson, the inventor of BT and a leading proponent’s exit from the BT chip market. Bluetooth detractors will no doubt dance a jig on the grave of this shuttered Ericsson unit, and will naturally count this as evidence of their predictions. While I cannot fully dismiss the grave news, I think I can argue that the impact is not lethal to the growing BT technology. Ericsson says that they are closing the unit because they don’t expect it to be profitable, not that they don’t expect Bluetooth to succeed. This could simple mean that they don’t see profit as a chipmaker for BT. Johan Akerson, VP Marketing, said: “Bluetooth is now a mature standard, and numerous semiconductor manufacturers are supplying Bluetooth products in large volumes.” Essentially, there are other manufacturers making BT chips, and prices have dropped to the point where two things have happened: 1) BT chips are cheap and being deployed more frequently in a virtuous circle of scale economies, 2) Ericsson can’t make big money in that virtuous circle. Consider Ericsson and BT to be somewhat like Proxim and WiFi: It doesn’t matter that Proxim was early to make WiFi chips, when chip prices dropped, there was little profit to made from them. But WiFi is hardly dead, and neither is Bluetooth.

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