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Monday, June 23, 2008

Any Lessons Zigbee can Learn from Bluetooth

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It took Bluetooth longer than expected time to go through the hype cycle. But, once Bluetooth got into the fast lane, it has never disappointed the industry in terms of volume of shipment. Bluetooth has plenty of reasons to celebrate its ten-year anniversary this year. Zigbee, now suffering an unanticipated low adoption rate, is hoping to repeat a similar curve to its own marketing success. After all, this is only the 6th year of Zigbee. Unlikely, in terms of volume of shipment!

As a comparison, in 2001 its 3rd year, Bluetooth shipped 10 million unit and tripled to 35 million in its 4th year, though these numbers were still well below the forecast. Where is Zigbee at today? Still struggling for its first 10 million. According to ON World report, in 2007, the 5th year of Zigbee, the shipment was 7 million, up from 5 million in 2006. However this is Zigbee and 802.15.4 combined. Zigbee volume could be (I tend to say must be) actually much lower than this number. This is because many 802.15.4 silicon vendors have been forced to launch their own or to support others proprietary protocols for market niches.

Two industrial organizations of technologies based on 802.15.1 and 802.15.4 respectively, two standards of the same IEEE category, what has made their marketing performance such a big different?

First, from the view of supply chain, the two technologies are driven from the opposite end. Bluetooth started from the high end, i.e. the consumer electronics. Bluetooth since the first day has been targeted to solve the problem how people talk over cellular phones hands-free and wire-free. Bluetooth founding members include Ericsson and Nokia, the 1st and 3rd phone manufacturers then; soon joined was the 2nd Motorola. The demands or the pull force was to certain extend guaranteed even at the dark. At the every beginning, although only high end phones had equipped Bluetooth, and although there were usage issues here for there, the shipment volume was enough for the semiconductor suppliers to survive and then have healthy growths. Zigbee, however, started from the other end, the low end. The two convincing founding companies were from the semiconductor section of Philips and Motorola (now Freescale). In its targeting market, home automation, appliance control etc, there was no influential leaders.

When you pull something, the direction is constant no matter how hard it could be. Even today, the number one application of Bluetooth is still cell phones and earpieces. But if you just push, the thing will go to where it is the easiest as a result of compromise of all forces, usually not where you want to go. One problem for Zigbee is the keep-updated specifications without backward compatibility, trying to meet new requirements of suppose new killer applications.

Secondly, the life cycle of products between Bluetooth and Zigbee destines the prosperity of the former and the still of the latter. The longest cellular phone life cycle is found in the "cheap" North America, which is however as short as 2-3 years. In the "luxury" Far East Asia and Europe, the life cycle is 12 to 18 month. This means, after this time, most consumers will upgrade their products. This also means, every this period of time, one or more generations from the same product line would be launched to the market from the same manufacturer. When were you last time to upgrade your light switch or appliance? I bet you it was when they stopped working. As few people would like to upgrade because of the benefit of Zigbee, there were not many people upgrading phone just because of Bluetooth. But they upgraded or replaced their phones any way. This is the culture globally for any "show-off-able" products, cars, phones, cameras, clothes, no exception. How many people show-off their houses (I mean inside features), microwaves, heaters...? Ironically in this story, the "bees" have a longer life, too much longer.

When products life is long, manufacturers and customers both will invest in a technology very carefully. Maturity is demanded esp. for those market leaders; normally they wait and see. While in a market of short life cycle, the leaders would like to respond more actively or even proactively, taking steps to offer new product features to grow their market share and profit margin.

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