Bluetooth is still not hot

Car OEMs are still struggling to connect with mobile devices, but there are still problems with Bluetooth and USB in-car

Indeed, all of the major car OEMs are currently addressing connectivity issues, and all cars sold worldwide now offer Bluetooth and USB connections. At the beginning of 21st century, you would think that carmakers would certainly have met the consumer's wish: all mobile devices would be connected to their cars.

But you may be wrong.

Bluetooth is still a problematic "standard". Consumers and car dealers are or are already experiencing a connection, some experience is amazing, some experience is hopeless. Many OEMs are still looking for ways to connect, although some have managed to solve the problem.

The issue has become clearer this week than ever before, when Isuppli visited car dealerships in Paris this week. The two Fiat dealers surveyed have basically not included the hope for the Blue&me solution, which is a combination of USB and Bluetooth. A Ford dealership said its sales staff reported no problems in selling Bluetooth connections.

Bluetooth is still not hot

In fact, Bluetooth is a wonderful technology with powerful capabilities. When the Bluetooth connection is working properly, the consumer is almost completely unaware of the technology and running well.

Consumer electronics and cars should work this way to meet demand instantly. You turn the key, the car starts! The disconnect between expectations and actual performance helps explain why Bluetooth is still gaining acceptance.

Interestingly, only in the United States Bluetooth has indeed been firmly accepted-no reservations. Isuppli's technology-availability report shows that, according to preliminary data, 52% of North America's 2008-series cars have Bluetooth installed, while the 2009-series models have risen to 86%. Japan, by contrast, still seems sceptical about Bluetooth, with a 2008-series Bluetooth installation rate of 36% and a small 2009-series rise to 42%. Of course, in Japan, domestic technical problems may be an influential factor, including the existence of alternative wireless connectivity schemes. In Europe, the Bluetooth installation rate for the 2009-series models is 62%, up from 48% of the 2008 series.

Sync thrive

The success of OEMs such as Fiat and Ford has been a major contributor to the growth of these on-board connectivity technologies. Fiat was the first car manufacturer to adopt Blue&me solutions. But Ford was quick to follow, offering a sync solution in the US and a Bluetooth-only solution from Nokia in Europe.

Blue&me is of great significance as the first Usb-bluetooth solution. It is a revolutionary development that allows users to change their roadmap and voice through the USB drive they provide. The Ford Auto sync adds software scalability and is compatible with the ipod, better than Blue&me.

Sync has become an industry standard for implementing Usb-bluetooth solutions. But that does not mean there is no room for improvement, perhaps for this reason, the second-generation sync that Ford is scheduled to launch in Europe in 2009 will turn to Elektrobit, which will include GPS technology, which makes it suitable for ecall applications, although the Bluetooth connection is unreliable.

Ford seems to have adopted the Bluetooth solution in Europe, as Paris dealers say customers and salespeople don't report any problems. Ford dealers have recently started offering both USB and Bluetooth cars, as well as Bluetooth-only models.

The irony is that the Ford dealership is very enthusiastic about the Bluetooth solution it offers, but the customer never asks for the technology. This is one of the many challenges facing carmakers: predicting the needs and ideas of fickle consumers. Ford's success is in stark contrast to Fiat's experience in Europe outside Italy. German and French distributors rarely arouse consumers ' attention to blue&me.

But as a pioneer, Fiat is now beset by its first generation of solutions that, like the Ford Nokia solution, ignore the ipod compatibility. With the next Ford solution currently in the European market, and Fiat is expected to upgrade its own solution, this compatibility issue should be resolved.

In fact, several new BLUETOOTH-USB solutions will appear at the upcoming Paris Motor Show. OEMs who will showcase new solutions in the event include Volvo, Renault, and PSA motor groups. Volvo is expected to announce the end of November with Bluetooth and USB. Renault and PSA may be able to introduce similar connections to the market by the end of the year.

New benchmark

Behind these phenomena, the supplier relationship is changing. Handheld device compatibility has become a new benchmark.

Car makers already know the cost of a Bluetooth solution that lacks a wide range of handheld device compatibility. Only suppliers who can fully test and prove wide range of handheld device compatibility can win OEM customers.

But the challenge that OEMs face in adopting Bluetooth is not just handheld device compatibility, or handheld device compatibility, but a symptom of a deeper problem. The relatively low unit shipments in the auto industry have led some semiconductor manufacturers to give up the opportunity offered by the auto industry for Bluetooth technology.

These manufacturers may be making mistakes. The auto market's Bluetooth shipments are expected to reach 10 million by 2010, spurred by government-issued security regulations. The problem for developing the car market is that the handset market is setting the tone for product development, and the current product is becoming integrated with GPS and will soon integrate Wi-Fi. In the case of the car market, GPS and Wi-Fi are optional (nice-to-have) features that can be very expensive in a pressure cooker-like sourcing environment.

There is no doubt that the real battlefield of Bluetooth applications is the mobile market for headphones and handheld devices, which are shipped in billions of dollars. Companies that remain dynamic, such as CSR, parrot and Renesas, have at least benefited from market integration. There are few suppliers left in the market at present.

Drive on the fast track?

It is premature to assume that the BLUETOOTH-USB mix will be widely popular, but it does seem to be on the fast track and is expected to become a standard device. It is worth pointing out that there are regional differences, the Japanese 2008 car model USB equipment rate is 3%,2009 model will only rise to 5%. The European equipment rate will rise from 15% to 26%, and the US will increase from 16% to 35%.

However, the installation is inconsistent and not all allow upgrades. Bluetooth features such as mobile phone directory sharing and audio streaming should be more widely used in cars than currently available. Some people estimate that through Bluetooth, about 60% of mobile phones can transmit audio streams. Similarly, AVRCP and the portable navigation function that will soon appear will be expected to change the market.

Although Bluetooth has many potential, unpredictable performance and compatibility is still a big challenge for car dealers. Before Bluetooth can provide reliable and predictable connectivity, the technology will still face many challenges that will hinder its market acceptance.

Expect more Bluetooth for the car, specifically, hoping to show more usb-bluetooth. Bluetooth and USB are the lowest cost platform for high quality, low cost content transmission in the car.

Roger C. Lanctot is the automotive electronics analyst at Isuppli.