SUPERLOCAL SERVICES CREATE NEW BUSINESS

Huge Bluetoth potential – but there are critics

 

 

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D-Era 2/2001 – the newsletter about the new business opportunities in the Digital Era. Sent only to those who have subscribed. Published April 2, 2001.

 

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SUPERLOCAL SERVICES CREATE NEW BUSINESS

Huge Bluetoth potential – but there are critics

 

Even if Bluetooth ultimately fails to deliver total inter-operability between every device and every application - as some say - there might be less complicated tasks for the technology, still delivering important commercial value. Bluetooth might become a tool to introduce new services, cut into new revenue streams,  improve (and individualize) marketing and take a firmer grip of customers.

 

In March, Ericsson launced a new Bluetooth based ´access point´ called ´Blip´. It can communicate wirelessly, two ways, with any Bluetooth equipped device within 10 meters.

This might be one part of a development towards the existence of alternative wireless networks, out of control of the operators.

 

If Bluetooth equipped mobile phones (and Palm Pilots, handheld computers etc) will be widely spread within a couple of years, the possible applications for such products will be countless. According to Merrill Lynch (2000), 80% of all mobile phones sold will contain a Bluetooth chipset by the end of 2003.

 

BILLBOARDS. By equipping billboards with Bluetooth access points, passers-by will be able to interact with the billboard. They can request that further information be sent immediately to the mobile, they can register to get information later on (which results in a prospect database), they can download discount coupons (now being tested in Stockholm) or they can order the product right away.

 

WINDOW SHOPPING. In much the same way, stores can communicate 24 hours a day with people on the sidewalk. Thus it will be easy to get product information, and maybe download a demo video, even when stores are closed. Record stores can offer the opportunity to download short demo versions of the latest hits.

 

CAR PARK. For a car park it is easy to see the benefits from mobile payments using local access points. Suddenly they will be able to build a customer database, with customer profiles, one-to-one marketing, loyalty programs and individualized pricing among the many new commercial opportunities.

 

GAMES. A store selling electronic games, or a billboard advertising them, can offer downloads of free trial versions of new games. A number of people on the street can actually play together if the Ericsson Blip is used as an access point, since it features a game server - what a way to attract teens!

 

QUEUE TICKETS. Tired of waiting for your turn? Get a "virtual queue ticket" transferred to your mobile, then head off to do some shopping and when there is, for example, just two people ahead of you, an SMS will alert you. This increases customer service (and could build a database).

 

TOURISTS. The subway can transfer timetables and maps to your mobile. The airline can transfer individualized gate information and delays (already a reality with Scandinavian Airlines at the Stockholm Arlanda airport). The bus stop can tell you the number of minutes you will have to wait. At a trade show, you can be guided to a certain exhibitor (tested at Cebit 2001).

 

HOTELS. The Holyday Inn Wall Street already hands out Bluetooth equipped mobiles to its guests. These can be used to open your room, pay in the restaurant and bar, make in-house calls, access the internet and check out.

 

SPORTS. Another test being run in Sweden improves the pleasure of an ice-hockey game by offering real time information in the mobile terminals of the spectators. They get background statistics, information on the player presently in focus, and real-time pulse information from sensors on the bodies of the players. For example, the players can be listed in order of the degree of fatigue to the very second. In this case though, Bluetooth is used in combination with the wireless LAN standard 802.11b (there ARE challenging technologies).

 

All this sounds nice, but isn´t there a catch somewhere?

 

Of course there are difficulties to overcome. The major one is Bluetooth penetration, which is of paramount importance. Range is another important factor. Bluetooth has a range of 10 meters in its basic version, although this can be extended to 100 meters. Short range, on the other hand, is not always a disadvantage – sometimes the more local the service the better it is.

 

On the other hand, there are critics saying that Bluetooth will never be big. There are four major points of criticism:

 

1. “The vision of total inter-operability (that is, all devices within range communicate with all other devices) is simply too complicated, it will not work.”

 

2. “The security level of Bluetooth is way too low – Bluetooth equipped devices will be security holes, opening up for viruses and hacker attacks.”

 

3. “Bluetooth uses the 2,4 MHz frequency range, which can cause interference with the wireless LANs becoming more and more common.”

 

4. “The price is too high. Device manufacturers should not have to pay more than $5 extra to include Bluetooth, but that figure is today at least 10 times higher. The price is falling, sure, but too slowly.”

 

Then again, there are technical experts that dismiss this criticism. And after all, is HAS happened before in history that technical problems have been solved. A possible development is, that the most advanced Bluetooth visions (total inter-operability) fail, but Bluetooth succeeds in becoming an appreciated standard for applications a little less complicated (like some of the examples above).

 

Link to the Ericsson Blip site: www.ericsson.se/blip.

 

Par Strom

Strategy consultant and speaker

Atomer och bitar AB, Stockholm, Sweden

www.atomerochbitar.se/introeng.html

Tel: + 46 709 699 411

par@atomerochbitar.se

 

 

PUBLISHED BY the independent Swedish management consultancy Atomer och bitar AB.

 

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