VIDEO CASE 21–1 Connecting and Communicating without Wires

Consumers and businesses have embraced the Internet. Offering convenient and easy communication, the Internet continues to change our lives as new applications for its technology are developed. Internet use and applications have grown largely because manufacturers and software developers have continued to improve on the original concept and infrastructure. Now, wireless communication offers an opportunity to advance this process by stimulating new products, new processes, and new ways of communicating. Wireless opportunities and applications appear to be endless. An obvious benefit of wireless is the elimination of the nest of cables behind desks. From a manufacturing perspective, there are anticipated cost savings as well. Most promising, however, are the opportunities wireless offers for more interactive and instantaneous communication. The promise of wireless takes “anywhere, anytime” to a new level.

A variety of technologies can be used to create wireless products and services. There is long-range and short-range wireless. Wireless can be delivered via satellite or cellular, and now for short-range options there is Bluetooth and 802.11. Wireless technology development and adoption is where the Internet was more than five years ago. There is promise, there is excitement, and there is uncertainty.

Consumer Electronics Products and Bluetooth

What is Bluetooth and what could it possibly do for us? These were the questions on the minds of the attendees of the Consumer Electronics Show (CES) in Las Vegas, Nevada in 2001, where the buzz was “wireless.” Just a few years ago Comdex, the largest computer trade show, attracted large audiences. However, with the slowdown in the computer and telecommunication industries, manufacturers are bringing new products to CES. The major players in the computer and telecommunications industries see the consumer electronics market as an opportunity to generate revenue by showcasing how they are using technology convergence to develop not just consumer gadgets, but new products and infrastructure formats to improve productivity and connectivity and to open new markets.

Bluetooth is a technology standard allowing electronic products, computers, and components to communicate with each other without the use of cables. It uses radio transmissions and the device looks like a tiny radio transmitter on a microchip. The range for Bluetooth transmission is about 10 metres, making it ideal for office and home use providing wireless connections between computers, keyboards, printers, and fax machines. “Cable spaghetti” from under the desk could be a thing of the past. In addition, the possibilities for wireless products include watches that can take pictures and watches that can help you if you are lost and need to know your location. There are attachments that can transform a personal digital assistant (PDA) into a phone. And, in case you don’t have enough radio stations on your car radio, it is now possible to receive satellite radio in your car. Although this product is illegal in Canada, it is possible in other parts of the world to purchase a laser radio detector. Another benefit of Bluetooth comes from the ability to connect to the Internet from virtually anywhere using handheld devices.

A Viking King Brings Together Modern Market Combatants

Bluetooth is an appropriate name for this wireless technology standard that is undertaking to increase connectivity globally. Bluetooth was the nickname of a Danish king who was able to successfully bring together clans in Denmark to battle foreigners instead of each other. Like this Viking king, the Bluetooth Special Interest Group (SIG) is a consortium of major industry players in computing, telecommunications, and net-working working with each other to develop and commercialize this particular wireless standard.

Ericsson, a Swedish telecommunications company, was the founder, and has come together in a unique partnership with others such as IBM, Intel, Nokia, and Toshiba in an attempt to set the industry standard before the product battles in the marketplace happen. So, in contrast to the Beta and VHS battle for a video industry standard, a consortium of more than 2000 companies worldwide is jointly developing Bluetooth technology.

Skip Bryan from Ericsson is convinced that this big new idea will be successful where others have failed. To begin with, the large number of consortium members will assist in new-product development and adoption. Second, due to the large number of members, companies from a wide range of industries are developing wireless applications including such industries as health care, avionics, and oil and gas. Within these industries it is the large organizations such as Shell, Sony, Casio, and Boeing that are investing in and experimenting with this wireless standard. Unlike the competing wireless standard IEEE 802.11, Bluetooth adopters have access to it through a royalty-free license. This removes a financial barrier for those companies wanting to experiment with wireless technology and product development. The access to this technology to use in product and service development is similar to the access of the Internet for new applications.

Canadian Companies Embrace Bluetooth

Dr. Jeff Rabin, a technology analyst and leading expert on wireless technology from Dundee Securities in Toronto, believes Bluetooth has great potential to succeed. “There’s so much momentum behind it and it’s such a juggernaut moving forward.” Dr. Rabin sees Canadian companies playing a role in the adoption of this technology. Canadian companies that are members of the consortium include Mitel and Research in Motion (RIM). Although RIM has yet to announce any Bluetooth products, Mitel is actively pursuing this opportunity.

The number of Canadian companies doing well with products and software applications to support Bluetooth continues to grow. Manufacturing companies like Mitel are developing wireless products; there are, however, more Canadian companies involved in the development of software and special applications rather than hardware. This, says Dr. Rabin, is due to the lower capital requirements necessary to start a software company compared with a manufacturing plant. Arkon Networks in Richmond, B.C. is a success story in providing design expertise in wireless technology. Other companies such as PsiNaptic in Calgary and Colligo Networks, Inc. in Vancouver are involved in developing applications for supporting wireless networks through unique offerings. There appears to be a wide range of applications for wireless technology in consumer electronics, computer and telecommunication hardware, and network services for both offices and home environments.

The Possibilities of a Future with Wireless

An important factor to consider in the adoption of wireless products is the nature of the technology itself. Wireless benefits are obvious. The freedom to talk on the phone or use the computer without lines and cables is appreciated by anyone using electronic products. With cable-free access and lower costs, wireless success appears inevitable. However, it appears that these benefits are only the beginning. Applications for wireless are being explored in a wide range of industries for a multitude of purposes. Extending the access to connectivity is a reality. The C-pen scans text and sends it to a computer, eliminating that onerous task of rekeying information. Ericsson has introduced a wireless headset, for U.S.$299, to connect a cell phone in a purse, briefcase, or pocket. For those concerned about exposure to microwaves so near their head, this new headset provides hands-free access to a cell phone without fear of health issues. With new legislation in both Europe and the United States prohibiting the use of handheld phones while driving, wireless technology could play a role in making driving and talking safer. The wireless headset is one hands-free option, but DaimlerChrysler will soon introduce another option with a wireless docking station and entertainment unit.

There are many ways in which wireless technology will continue to provide new product development opportunities for companies and benefits for connecting everyone, everywhere. Wireless provides faster access to the Internet. In Europe, wireless data services such as text messaging are widely used. This is one of the most valuable benefits in the long term for this technology. Wireless means instantaneous information exchange, resulting in quicker decisions. Many believe that this is what will continue to drive demand and application development. Mike Walters, a Nokia marketing manager, says, “The single most valuable advertising space on the planet will be the display on your hand-set.”

Retailers need to be looking at the opportunities of “location-based advertising.” This is where companies can provide local, timely messages to customers as they enter a store or restaurant. For example, McDonald’s could use Bluetooth technology to transmit ads or discount coupons to any cell phone in one of its restaurants. Another possible use of the technology is within a bookstore, such as Indigo, where a customer could use his or her cell phone or PDA to receive book reviews of any book on the shelf. Location-based advertising has great potential to assist the customer in-store with specific information on products, services, discounts, coupons, and loyalty incentives. Marketers selling without wires will need to carefully implement their programs to meet the changing needs of their customers.

Cable replacement is not just for computers and peripherals. E-books could evolve into wireless books. Cars could be produced without wiring harnesses. Short-range wireless could make it easier for anyone in an office or plant to access important production or customer data—anywhere, anytime.

The possibilities with wireless appliances, electronics devices, PDAs, cell phones, computers and peripherals create almost endless opportunities to generate new products and markets. Changes in communication access and purchasing patterns began with the adoption of the Internet and e-mail. With the successful adoption and integration of wireless technology, the implications for marketing companies interested in interactive communication is wide ranging. Wireless technology enhances Internet access and broadens the scope of applications for a variety of industries to improve and increase communication with suppliers, customers, family, and friends.

The future of this technology lies in the ability of the computing, electronics, and telecommunication industries to continue working together in an effort to create products and applications useful to the market. The Bluetooth SIG has a vested interest in making technology convergence through wireless not just hype, but a reality.

1		Identify wireless products or applications that will enhance connecting a customer with a company. Discuss the implications of being able to connect with a customer everywhere.
2		In your opinion, will wireless technology support multi-channel marketing? Yes or no. Discuss your position.
3		If you were a product manager at Maytag, a leading manufacturer of household appliances, would you be interested in exploring the possibilities of integrating wireless technology in any of your products? Why or why not? Discuss your position.
4		Location-based advertising is an interesting way to communicate with a customer. Discuss the pros and cons of this concept from the perspective of both the retailer and the customer.