January 2004 ::: GREG BARTLETT. The PearLuna Group. Business Development Consulting. Bluetooth & Home Audio/Video
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1 January ::: GREG BARTLETT The PearLuna Group Business Development Consulting Bluetooth & Home Audio/Video
2 THE PEARLUNA GROUP BUSINESS DEVELOPMENT CONSULTING Bluetooth & Home Audio/Video NOTE: THIS REPORT IS EXCERPTED FROM A DETAILED MARKET ANALYSIS OF BLUETOOTH-ENABLED HOME AUDIO/VIDEO ELECTRONICS. TO INQUIRE ABOUT THE FULL REPORT, CONTACT THE AUTHOR. Report prepared by Greg Bartlett - The PearLuna Group 15 nd Av S, Ste 3 Seattle WA 981 () 39-8 greg@pearluna.com 3- The PearLuna Group
3 Table of Contents Research & Analysis Supplier Brand Recognition 3 Product Plans Bluetooth vs. IEEE Cost Sensitivity Perceived Technical Limitations 7 Selected Comments 9 Further Possible Projects 11 Business Development 11 Brand Development 11 Specification of Reference Designs 11 Conduct Market Research 11 Write Application Notes 11 Develop an Educational Web Site 11 i
4 Chapter 1 Research & Analysis Personal interviews and an original survey yield useful information about Bluetooth perceptions & plans in the home A/V market. More than 1 personal contacts working in the consumer electronics industry were surveyed and interviewed for this report during the month of January 3. Interviews were conducted a) over the telephone, and b) in person during the Consumer Electronic Show. I also designed and administered an Internet-based survey during January. Survey results were automatically reported using a software product called WebSurveyor. The study was administered to the same pool of relevant industry contacts. The pool of contacts includes many individuals that had done business with me at Digital Harmony and PAVO. They are currently employed at the following companies: API, wire, 3com, Advansys, AEI Music Network, Altec Lansing Multimedia, AMX, B&W, Bang and Olufsen, Bose, Boston Acoustics, Chinook Television, Creative Labs, DENON/Marantz, Digigram, Dolby Labs, Eastern Electronics, Echelon, Escient, General Instruments, Harman Consumer Group, Hitachi, Infinity, Jamo, JBL, JVC, Kenwood, Lexicon, LG, Linn, Magnolia HiFi (Best Buy), Matsushita, Meiloon, Meridian Audio Group, Mitsubishi, Monster Cable, Nippon Columbia, Onkyo, Philips, Pioneer, PMI, Polk Audio, Roland, Samsung, Sharp, Sony, Thomson, THX, Toshiba, Walt Disney, Yamaha, and ZapMedia.
5 Supplier Brand Recognition I first surveyed my contacts to determine which, if any, Bluetooth embedded software suppliers they knew of or were working with. I asked about the following companies: Adamya Extended Systems RTX Telecom Atmark Grape Systems SiliconWave BlueLogic IBEX Tality CSR ImpulseSoft Troy Wireless DCM Technologies IVT Widcom Digianswer Open Interface Zucotto The following graph summarizes my findings: Which, if any, of the following suppliers of embedded Bluetooth software do you recognize by name? (select all that apply SiliconWave 31. % CSR.3 % Tality 15.8 % Digianswer Widcom 1.5 % 1.5 % Zucotto Adamya Grape Systems BlueLogic Extended Systems 5.3 % 5.3 % 5.3 % 5.3 % 5.3 % ANALYSIS SiliconWave and CSR are well known companies within the home audio/video companies I met with and surveyed. 3
6 Product Plans Contacts were asked to indicate whether or not various home electronics products would likely be available with Bluetooth connectivity by 5. I then inquired about where each company was with regards to any active Bluetooth development projects. The following graphs summarize my findings: Which, if any, of the following home products do you think might be available with Bluetooth in the next -3 years? (selec Portable audio players Universal remote controls 57.9 % 3. % Whole-house audio headphones Home control devices (e.g., lighting, security) Home audio/video server products 3.8 %.1 %.1 % Rear-channel home theater speakers Remote audio speakers Utility meters 1.1 %.3 %.3 % Other Child safety products (e.g., monitors) 1.5 % 1.5 % What stage in the Bluetooth product planning process is your company? We have no plans to use Bluetooth at this time 33.3 % Not applicable to my company. % We are discussing product plans and strategy. % We have products being sold today 11.1 % We have products in development 11.1 %
7 ANALYSIS Most had low expectations that Bluetooth audio would exist in the home, other than for low-quality headphones. I was surprised at the lack of forethought regarding rear-channel, band-limited speakers. Most companies are just beginning to consider Bluetooth, immediately for control applications. Some are adamantly refusing to consider Bluetooth over 8.11 for wireless home audio (see next question.). Bluetooth vs. IEEE 8.11 Contacts were asked whether or not they felt that 8.11 was generally a better wireless solution for home audio than Bluetooth. The following graph summarizes my findings: For the above products, do you think that 8.11 (WiFi) is generally a better wireless solution than Bluetooth? Maybe - it depends on the application 3. % Yes 1.1 % I don't really know 1.5 % No 5.3 % ANALYSIS A majority believes that there are applications (biased towards the low quality end) for Bluetooth audio. Many felt strongly that 8.11 is indeed better, in some cases the only viable solution. Many recognized the proliferation of new 8.11 whole-house media server and wireless audio distribution products introduced this year at CES, and consider this a 5
8 testament to their bias. (Although most did not seem to consider cost in their analysis of this questions.) Cost Sensitivity Contacts were asked to arrange various networking and connectivity technologies in terms of the manufacturer s per-node implementation cost. They were then asked to indicate what they felt would be the price point necessary for Bluetooth to become ubiquitous in home A/V products. The following graphs summarize my findings: Please arrange the following home networking technologies in order, where 1 is (what you would guess is) the most expe FireWire (IEEE-139) 8.11 (WiFi) HomePlug (powerline) USB. HomePNA (phoneline) Bluetooth Ethernet In order for Bluetooth to succeed in the home electronics marketplace, what would you say is the maximum acceptable p $1-$ 1. % $3-$5 3.5 % Less than $1 17. % $5-$ % $8-$1 5.9 %
9 ANALYSIS Most supported the graphed ordering of cost-to-implement for the various technologies. From most expensive to least: FireWire, 8.11, HomePlug, USB., HomePNA, Bluetooth, and Ethernet. Nearly % of the contacts believe that Bluetooth needs to cost less than US$ per node to implement (cost of components, any licensing/royalty costs, firmware). Surprisingly, nearly 1 in felt that they could absorb a per-node cost of between US$5-1. Few have an accurate idea of the per-node costs of Bluetooth implementations today. Perceived Technical Limitations Three possible limitations of Bluetooth audio technology were explored. (The technical characteristics presented were not considered to be limitations for wireless control command transmission applications such as home theater remote controls). Contacts were asked to rate how they perceived each technical characteristic in terms of whether or not it was a severe limitation, or not a limitation at all. The characteristics selected: 1. A range of 1m for the typical Bluetooth radio,. A limitation of 7 active nodes per Bluetooth piconet, and 3. A practical audio bandwidth limitation of 38 kbit/s. The following three graphs summarize my findings: The range of a standard Bluetooth radio is 1m. This limits its usefulness to niche applications 7. % This is not really a limitation 9. %
10 A Bluetooth piconet is limited to 7 active nodes. This is not really a limitation 5.9 % This limits its usefulness to niche applications 7.1 % 1 If Bluetooth audio is limited to a bandwidth of 38bps, then Applications will be limited to low-quality audio 1.1 % Bluetooth audio presents good opportunities in the home. % Bluetooth audio is useless 1.7 % ANALYSIS Most felt that the 1m range and the low bit-rate were reasons to ignore Bluetooth audio/video. The 7-node per net limit did not seem to bother many of them. 8
11 Selected Comments The following comments were noted during the course of the interviews and survey. They do not represent a complete picture of all the comments and discussions, but rather point out the typical perceptions of Bluetooth in the home audio/video space. They are provided for informational purposes only. I have not focused on Bluetooth because we need 8 to kbit/s (and up) to handle delivery of multi-channel audio. So even headphones must receive this data rate to provide virtual surround sound like Dolby Headphone. My understanding of Bluetooth today is that it struggles to go above kbit/s. With 8.11b and other technologies available, I expect Bluetooth to be limited to stereo MP3, MPEG AAC-type applications with no headroom. (Bluetooth is) okay for lo-fi stuff close to the person, but not for the high quality required of whole house systems. At 7kbit/s, Bluetooth is a useless waste of time except for cell phone headphones will be the technology for 1m wireless applications. Wireless LAN will be 8.11X. I think the applications of Bluetooth will be accepted in Asia and Europe at first, because of its range (1m), especially in the personal audio area (including PDA and cell phone). The applications for home audio will be the second stage. As currently configured Bluetooth is quite useless for HiFi audio applications. For rear surrounds, in full bandwidth, the latency screws up the result. Audio and video should be sent in the same wireless transmission. They also must be synchronized or have the capability to synchronize multiple locations. (Bluetooth) wireless audio will not make it in the market as the quality is too low - too many customers have had really bad experiences with Recoton-type products. 9
12 1
13 Chapter Further Possible Projects Additional contract project ideas are presented, for future consideration. Business Development Co-development and implementation of strategic product plans In-depth analysis of a particular company, or relationship development Brand Development Write application articles for leading home entertainment magazines Develop print collateral targeted to the home audio/video market Specification of Reference Designs Create product specification documents for strategic reference designs Create application documents for strategic reference designs Conduct Market Research Specify and purchase market research studies from Intelect and others. Write a market research document for target markets & technologies Write Application Notes Write app notes for reference designs and components Write app notes for other possible applications Write other technical marketing documents Develop an Educational Web Site Goal of educating manufacturers and consumers [END] 1 1
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