On May 22nd, 80 specially invited guests celebrated the 10th anniversary of the launch of Bluetooth at Casino Cosmopol in Malmö, Sweden. A colorful retrospective of the technology’s and brand’s first decade was presented by four speakers – Mats Lindoff – CTO Sony Ericsson, Micco Grönholm – Brand Development Director at Pyramid, Stephen Nachtsheim – the former VP of Intel and Dr. Mike Foley – CEO of Bluetooth SIG.
Today, Bluetooth is one of the world’s most prominent wireless technologies, incorporated in over two billion shipped products. It is also the world’s fastest growing brand name. Learn more in the following editorial from the Rapidus on-line news agency.
Donate the technology – and make billions
In brief: from zero to over two billion SKUs in less than 10 years. At its 10th anniversary party in Malmö, the team behind Bluetooth was able to look back on a decade in ‘overdrive’. Both for the technology, originally developed by Ericsson at Lund, and for the brand, marketed by Helsingborg B2B agency Pyramid Communication. By donating its wireless technology, Ericsson won a global market. Instead of fighting ‘tooth and nail’, as Sony and Toshiba did over dominance in the blue laser format, companies can learn from the example set in the commercially blossoming Öresund region: alone is not always best, and generosity can be good for business.
By Erik Olausson and Anna Palmehag
The technology could as easily have been named ‘Flirt’ since it brings people closer without physical contact. But, when Intel development engineer Jim Kardach received Frantz Bengtsson’s classic “The Longships” as a hospitality present during a visit to Lund, he was enthralled by the legendary Danish Viking chieftain Harald Blåtand. The name, which also happened to be Ericsson’s ‘stealth mode’ project name for the new technology, stuck.
10 years, and two billion SKUs later, Bluetooth technology has become the de facto global standard for short-range wireless communication. It is also one of the world’s most recognized brands – despite the fact that neither Pyramid nor its clients have invested a cent in direct consumer advertising.
Success was not a ‘given’. In 1997, Ericsson initiated discussions with Intel about the wireless technology it then had in development. At that point, infrared communication had been on the market for decades, for remote controls as well as computer applications. That same year Microsoft, IBM and Compaq had launched HomeRF, a wireless specification for home networking.
One advantage of the Ericsson technology was its low energy requirements. But right from the start the team behind Bluetooth was certain that it wasn’t the technology that should be promoted – but rather the visions and potential it could fulfill.
When the Bluetooth technology was officially launched at simultaneous events on May 20, 1998 in Tokyo, London and San Jose, the global press was already ‘ignited’. Besides Intel, the collaboration had also attracted Nokia, Toshiba and IBM, which helped ensure media attention. To attract Toshiba and IBM, then the world’s largest producers of portable computers, was a real coup – the whole issue of mobility and wireless communication was topped the priority list for Ericsson, and the possibility to wirelessly link mobile phones to computers was the key.
To sell the technology, the marketers at Pyramid, with Micco Grönholm in the lead, drew up a list of potential scenarios that warmed the hearts of the electronics manufacturers – from text messages and cell phone conversations forwarded to wristwatches to being able to control your computer from your cell phone.
But it wasn’t just marketing that spread Bluetooth around the world like wildfire. A key factor was Ericsson’s decision to give the technology away. Instead of focusing on licensing revenue, the company chose to broaden the market itself.
Why? Because communication technology companies are rather like kids in a schoolyard – everyone wants to be part of the gang. As the technology’s value grows with its number of users, each company wants to grab its share of the market. The wider the range of products that can communicate with each other, the greater the potential for each – watches, computers, mobile phones, etc. If you’re the only person in the world with a telephone, who are you going to call?
It’s easy to draw parallels between Bluetooth’s battle with competing standards and the long battle over tomorrow’s film format. For the past six years, Sony and Toshiba have beat themselves bloody trying to convince electronics producers, consumers and, not least, the film industry to adopt one of their competing formats for the recording and distribution of film and video. Since the formats were essentially identical, the outcome was of no material value for consumers. But the delay in investment by producers as well as consumers, while waiting for the battle to be decided, injured both players as well as slowing the market’s overall development.
The founders of Bluetooth chose, instead, to establish a Special Interest Group (SIG). Cheered on by Nils Rydbäck, VP at Ericsson, and his counterpart at Intel, Stephen Nachtsheim, the companies agreed to give the details of the technology to each company that allied itself to the SIG.
At first appearance, this idea looks like economic suicide. But the fact is that the Bluetooth SIG attracted 1,000 adopter companies in its first year. That number now stands at over 10,000, and over two billion Bluetooth-enabled devices are now in circulation, a good percentage of which bear the Ericsson label. And the numbers just keep on growing. Would that have happened if Ericsson had kept the technology to itself?
The Bluetooth journey has not been ‘all roses’ however. Collaboration with Nokia was strained until Ericsson agreed to deed the Bluetooth brand mark to the SIG. And the early momentum nearly descended into lethargy when initial marketing hype didn’t live up to performance. But the SIG’s now-10,000 members have managed to maintain a united front by focusing on the goals they want to achieve rather than finding the perfect technical solution.
And, in pace with the ever-growing number of companies incorporating Bluetooth in their products, the relationship between the brand and the technology has also changed. Today, it is actually the technique that spreads the brand. That little blue-and-white mark, comprising the Norse runes for H and B, is recognized far beyond nerdish circles.
The value of the brand is witnessed by the fact that, just in time for the 10th anniversary, the SIG has chosen to bring in several new technologies under the Bluetooth ‘umbrella’. One variant will enable data transfer rates up to 20 times the current level, while another draws so little energy that battery changes may never be needed. This means that Bluetooth devices can be placed where they need never be accessed – in the sole of a running shoe to measure tempo, or in a shirt button that transfers EKG data.
Despite the fact that Bluetooth is a true success story, it would be difficult to repeat the feat today. Ericsson, with its single-minded focus on mobile telephony, developed the technology as a ‘sideline’, and could then give it away without thinking twice. A small start-up hoping to generate wealth with a unique and revolutionary idea might not be so benevolently inclined. And the timing for Bluetooth’s release – when the market was screaming for a viable short-range wireless technology in the late 90s – was perfect.
Still, one can imagine what might have happened if Sony and Toshiba had followed Bluetooth’s example. After six years and billions spent by both parts on lobbying and marketing, Sony’s Blu-ray finally won the battle. Only now is the market beginning to see a really appetizing offering of HD devices and media.
How much would both companies have benefited by collaborating right from the start? Ask Ericsson and Intel.
R A P I D U S – the news service about growth in the Öresund region