UK firm prepares to deliver $US8 Bluetooth chip

Cambridge Silicon Radio is getting ready to deliver a single-chip Bluetooth product to customers by September at a price per chip at least half that of current analysts' estimates.

Cambridge Silicon Radio (CSR) is getting ready to deliver a single-chip Bluetooth product to customers by September at a price per chip at least half that of current analysts' estimates, according to a senior executive at the UK-based single-chip radio company.

Bluetooth is a wireless PAN (personal area network) standard aimed at enabling a wide variety of devices, including mobile phones, PCs and handheld computers, to exchange digital voice and data over short distances using low-power radio signals.

The first Bluetooth-enabled devices are due to become generally available in the fourth quarter of this year.

Analysts today peg the price for a Bluetooth chip at between $US20 and $US25 with the cost not expected to drop to the $US5 range until 2004 or 2005.

"Industrywide, we accept the average sales price for a Bluetooth silicon solution to be in the neighbourhood of $US20," Joyce Putscher, director of consumer and converging markets and technologies for market research company Cahners In-Stat Group, said in a recent phone interview.

CSR, however, claims it will be able to deliver its first product, the single-chip BlueCore01, for $US8.20 for volumes of 1 million units per year.

Depending on users' needs, the price might rise to between $US10 and $US12, which still remains below the competition’s figures, said Eric Janson, CSR's vice president of application engineering.

Although CSR’s price for its Bluetooth chips appears quite low at the moment, a number of factors can force the price per chip considerably higher, Putscher said.

“Not everybody is necessarily going to order 1 million unit quantities right now, but they certainly will in the future” she noted.

Additionally, Putscher warned that some users may require more external components than others -- another factor leading to a higher-than-expected cost. However, "if CSR can deliver on what they are saying, they are on the leading edge,” she said.

The BlueCore01 chip is also smaller than those of its rivals, Janson claimed, estimating that the processor is four-tenths the size of a Bluetooth module from Ericsson.

"Our real aim is to enable the volume growth of the Bluetooth market with the smallest size and lowest cost chip," Janson said.

The final BlueCore01 silicon will debut at the end of this month, at which time Janson expects to be able to give some more concrete projections on shipping numbers.

Currently, he predicts that by the end of September, CSR will ship tens of thousands of products a month -- a figure that the company hopes to increase to hundreds of thousands in the not-too distant future.

Putscher at Cahners In-Stat, warned that the lack of current applications for Bluetooth products makes predicting timetables for usage of the technology somewhat difficult.

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