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Bluetooth Still Has Some Upside Potential

After an explosive year of growth in 2005 that has seen the Bluetooth market more than double, 2006 looks set to provide another healthy year of profits for Bluetooth vendors.

ABI Research concludes in a new study that the market for Bluetooth radios will grow by 71 percent to a level just over 500 million radio shipments in 2006. Stuart Carlaw, Principal Analyst, Wireless Connectivity, notes, "This growth will be attributed to extremely robust attach rate gains in the cellular handset market as well as a continuation of the explosive growth in the headset market."

The report forecasts that the market will grow at a compound annual rate of over 40 percent between 2004 and 2011, and equipment shipments are expected to break the 1 billion mark by 2009. Several new applications for Bluetooth are likely to come to the fore in the medium term: most notable among these is the gaming market, which is likely to be spurred by the releases of the Nintendo Revolution and Sony's Playstation 3.

Carlaw adds, "The importance of the stereo headset cannot be discounted. This product provides one half of a match made in heaven with music-enabled cellular handsets. We expect this type of product to drag Bluetooth into a myriad of other use cases, such as rear seat entertainment in the vehicle and the long-awaited Bluetooth MP3 player."

This report comes at a critical time for Bluetooth as silicon providers and OEMs begin to consider the inclusion of a UWB physical layer as the high data rate link for Bluetooth. Questions still remain as to whether the battle of the UWB standards will have a serious impact on uptake from a manufacturer's perspective. Going forward, however, Ultra Wide Bluetooth may well be the most prolific application for UWB.

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