It's true that Bluetooth is a powerful idea with some good science behind it. And it uses the 2.4-GHz frequency, which, unlike the costly 3G spectrum, has the virtue of being unregulated. Both Compaq and Hewlett-Packard (HWP) recently released devices that are Bluetooth-compatible.
But Bluetooth has some serious problems that have yet to be addressed. Start with compatibility: In the United States, there are already wireless networking technologies in use. One of them, 802.11 (the horridly technical name comes from an engineering standard) is considered the market leader; Starbucks (SBUX) has announced it will install 802.11 in some of its U.S. cafes to allow customers with laptops wireless access to the Net. But 802.11 is incompatible with Bluetooth, because both use the same frequency spectrum. There are companies working to harmonize the two technologies, but as of yet no firm has been able to solve the protocol problem.
This technological conflict may be why Microsoft (MSFT), an early proponent of Bluetooth, decided against incorporating Bluetooth into Windows XP.
Bluetooth also leaks like a rusty pail. Both Bluetooth and 802.11 appear to have significant security problems. James Atkinson, a Massachusetts-based security consultant, believes Bluetooth's architecture is intrinsically insecure. "A couple of high-school kids with a scanner and a soldering iron could crack it in minutes. It wouldn't even slow down a professional," says Atkinson, who has security experience in both government and private industry.
Such predictions, like those of Y2K anarchy, may be bunk. But until Bluetooth technology begins passing some crucial market tests, it's hard to see how it will be widely adopted for any real-world Internet applications.
4. M People
"The wireless world, especially in Europe, is ready and eager to embrace 'm-commerce.'"
Scores of companies have sprung up recently promising that in just a few years, Europeans will trade stocks, pay bills and do a good deal of their shopping via their phones. Especially because mobile phones can locate customers precisely, the purveyors of m-commerce are confident that location-tailored telephone commerce is going to be huge.
It is certainly true that Europeans have agreed to pay for certain transactions over the phone, in some cases more quickly than could have been predicted. Approximately 10 billion SMS messages worldwide are sent every month, up from zero just a few years ago. (In the United Kingdom alone, the number will pass 1 billion a month some time this year.) Collectively, those text messages represent real money; some European telecom firms now count on SMS messages for between 10 percent and 15 percent of their revenue.
