Can Automotive Bluetooth Outgrow Its Telephony Niche?

ABI questions, how long is growth sustainable and can Bluetooth expand its horizons past telephony?

Oyster Bay, NY - November 18, 2004 - A new study by ABI Research confirms that Bluetooth penetration in the automobile will continue to enjoy sustained growth over the next few years, primarily in the form of hands -free kits and speakerphones. But ABI questions, how long is this growth sustainable and can Bluetooth expand its horizons past telephony?


According to analyst Dan Benjamin, "Bluetooth promoters envision the technology serving in the vehicle for entertainment and telematics purposes. It remains to be seen whether Bluetooth can capitalize in these automotive areas."

Consider Bluetooth as a telematics platform. "We see a number of companies going in that direction . . . sort of" says Benjamin. The Microsoft/Fiat initiative announced earlier this year is an example. Not many other companies have jumped on that bandwagon. "Yes, a couple of similar partnerships have been announced for Europe; but the trend there is to adopt much simpler systems. Telematics has not proved very popular in Europe, and cost reduction is paramount."

Some Bluetooth boosters have promoted the technology - - in the form of Bluetooth headphones for use with rear -seat screens - - for in -vehicle entertainment. But according to Benjamin, "in terms of sales in the automotive environment, those would become available several years from now, if ever." It really depends on how "media in the vehicle" develops over the medium -term. Will it be streamed in? Stored in a big media library? In the latter case, perhaps Bluetooth headsets might make sense, but it would still be a niche market.

ABI Research's conclusion: Bluetooth still holds great potential, but it's a complex and continually emerging picture. The new study, "Automotive Bluetooth," can help sort fact from fiction, describing how Bluetooth opens doors for automakers to utilize telephony in a cost -effective fashion, using the driver's own wireless account.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the web at www.abiresearch.com, or by calling 516.624.2500.

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