TI takes a bite out of Bluetooth chips

Chipmaker Texas Instruments announced on Wednesday that it is taking a bite out of two-chip Bluetooth products.

The Dallas-based company has developed the BRF6100 Bluetooth chip, which integrates the capabilities of two chips into one. Bluetooth is a wireless networking technology for phones and handhelds that allows devices within a 30-foot range of one another to exchange data at speeds of 720Kbps. Consumers with devices that include Bluetooth technology can link to one another and share resources, such as Internet and network access.

Combining the capabilities of two chips into one translates into less than half the power consumption, less space and, most importantly, it means that it costs less for manufacturers to include Bluetooth in products. In volumes of one million units, a single-chip TI product will cost less than $4 in the first quarter of 2003 when it begins shipping. This is down from early Bluetooth pricing of up to $10 per chip.

TI is targeting the chip at high-end cell phones.

"The chip indicates that the cost of the Bluetooth chips are being reduced, which is good for the industry," said Joyce Putscher, an analyst with In-Stat/MDR, a research firm. "In some cases, like high-end cell phones, the cost will be hardly noticeable to consumers because they are already buying other advanced features."

The relatively high cost of Bluetooth chips has been one of the reasons why Bluetooth has not caught on with device makers and consumers as the industry had expected.

According to In-Stat/MDR, the number of Bluetooth-enabled mobile phones will reach 20 million in 2002 and grow to a minimum of 300 million in 2005. Those estimates are down from projections that reached into the upper hundreds of millions.

TI program manager Matt McKinney would not comment on whether any device makers intend to use the new TI chip, but he said that manufacturers have been waiting for a Bluetooth chip to reach the $4 threshold before arming their goods with this type of wireless technology.

"We are trying to lower the pain of Bluetooth," he said.

There are only a few phones and handhelds using Bluetooth. Sony Ericcson, a joint venture between equipment maker Ericcson and Sony; Phillips Electronics; and German industrial giant Siemens all sell phones with Bluetooth capabilities. Hewlett-Packard sells an iPaq handheld with built-in Bluetooth capabilities.

News.com's Ben Charny contributed to this report.