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Q: How does the Bluetooth SIG see Bluetooth car kits compared to other applications of the technology? Are you considering the car kits as a driving force to increase Bluetooth popularity and take the technology to a new level of adoption?

A: The automotive industry is a growth industry for Bluetooth. We are already seeing many manufacturer-installed systems from companies such as Honda, Toyota, BMW, Jaguar, DaimlerChrysler and others. In addition to systems that are manufactured and pre-installed by the auto manufacturer, we are seeing many aftermarket car kits being developed by a range of companies, many of which are in Taiwan. Initially, we saw these from Nokia, SonyEricsson, Motorola and Parrot. We are now beginning to see more models from Taiwanese companies. The cost of the kits is coming down, and the simplicity of use is making them very desirable to many drivers.

Q: In its first steps into the market, Bluetooth did not provide enough interoperability. For example, Ericsson Bluetooth hands-free kits worked only with Ericsson Bluetooth-enabled cell phones. How is it now with Bluetooth car kits? How will it be in the future?

A: I think that was inaccurately reported, and I do not know of any real instances where one manufacturer developed a solution that would only work with its own products. Certainly in the first generation of products, interoperability problems existed in some instances. Today, Bluetooth products come from a diverse set of manufacturers and interoperability has improved as companies have learned from various experiences in implementation.

Q: What are the typical functions of Bluetooth car kits currently? How do you see their features in the future?

A: Currently Bluetooth car kits allow the driver or passenger to pair their phone to the car kit and, once paired, answer and initiate phone calls using the hands-free system. Some car kits are installed to make use of the car's embedded audio system. Other car kits use their own speaker system. Some utilize voice command prompts to initiate and answer calls.

Future developments will allow the car system to have more functions - for example, the car will be able to access the phone information, beyond simple calling. The user will be able to use the phone's contact book and 3-way calling functions. Some car companies, notably Fiat and Bentley, are already using Bluetooth in their on-board computer to collect vital diagnostics information. When the car is being serviced, mechanics can then wirelessly download diagnostics information using Bluetooth.

Q: Do you think Bluetooth car kits will be more popular as a solution for new cars or for aftermarket sales? Do you see aftermarket sales as an important booster to Bluetooth car-kit sales? If yes, when do you think this will happen?

A: I think both markets - preinstalled and aftermarket - are areas of growth. Both are interesting for different markets. The preinstalled or factory-installed products are in new cars - but generally people have cars for a long time - and people wanting the hands-free calling solution who are not in the market for a new car will benefit from the aftermarket kits. I think that, as more companies make aftermarket kits available and the cost goes down, there will be a greater demand for the kits. In addition, many countries are not legislating the use of a hands-free device if the driver wants to talk while driving. I think this will also drive demand.

Q: Which regions (countries) do you see adopting Bluetooth in the car market first?

A: The US is showing real excitement about this application. There are 22 car models available in the US with preinstalled Bluetooth hands-free systems. Japan is also a growing market for this application, with Toyota and Nissan pushing it. I think that as more aftermarket kits become available, we will see other markets really take off because of the availability of affordable solutions.

Q: Which regions (countries) are you expecting to play a key role in Bluetooth car-kits design and manufacturing?

A: Taiwan is already showing a great deal of work in this area. Many companies are creating aftermarket car kits as recently seen at Computex. We also see a lot of work being done in the US, Japan and Germany - not surprising considering these are the three biggest auto producers. However, China is quickly becoming a huge auto producer and auto market, so I would be very surprised if Chinese auto makers do not also get involved in production. For aftermarket kits, I think we will see Taiwan in a leadership position in design and manufacturing.

Q: What do you think about Taiwan's current role in developing the Bluetooth market? How many Taiwan companies are now members of the Bluetooth SIG? How many of them are involved in Bluetooth car-kit developments?

A: There are currently 97 member companies in Taiwan. Of those, I do not know exactly how many are developing car kits because not all of our members make their development plans known to the SIG. I believe that at least 10 of these are working on car kits.

Taiwan's role will grow. Taiwan is becoming a primary supplier of peripheral devices for Bluetooth mobile phones and Bluetooth enabled PCs. Many Bluetooth mice, keyboards, PDA keyboards, headsets, Bluetooth GPS receivers and car kits are being developed and manufactured in Taiwan. I expect this market share to increase and grow considerably in Taiwan.

While the market grows, Taiwan is staying in the background

According to data from the US-based market research company ABI Research, over 60 vehicle models around the world currently offer a Bluetooth car kit as either a factory- or dealer-installed option. On the factory-fitted (OEM) side it is expected that approximately 10 per cent of all vehicles produced in 2010 will have a factory-installed Bluetooth system (from around only 1 per cent right now), said Frank Viquez, director of automotive research at ABI Research. The company is also estimating the aftermarket segment of the Bluetooth car-kit market to be now worth approximately $230 million and this should triple in size by 2010.

However, Bluetooth car kits are not really considered by ABI Research as a driving force to take the technology to a new level of adoption. 'We see Bluetooth-enabled handsets as the real driver while Bluetooth car kits have and will only grow in popularity alongside the introduction and adoption of the technology in the mobile handset market,' Viquez stated.

He also said there is a caveat as Bluetooth headsets may somewhat stifle the adoption of Bluetooth car kits. 'Bluetooth headsets are both cheaper and more convenient to install and use than a Bluetooth car kit and are truly portable. Traditional users of wired hands-free car kits find that a Bluetooth headset serves the majority of their needs, so they do not necessarily see the need to upgrade to a Bluetooth car kit,' Viquez explained.

Concurring with Schneider, the analyst pointed out that the Asia-Pacific region, including countries such as Taiwan, Korea and China, is a key player in Bluetooth car-kit design and manufacturing. However, when asked about leading companies, he did not mention any Taiwan-based company as an actual or potential innovator in the Bluetooth car-kit arena. 'The main pushers of the Bluetooth technology into the car market, as we see it, are the car makers and the handset vendors such as Nokia, Motorola and SonyEricsson,' Viquez emphasized.

Although it is obvious that some Taiwan-based companies are now involved in Bluetooth car-kit developments, most of them seem to work in a non-innovative way driven by customer guidance. Several names, such as A-Ten Technology, Cellink, Huges Hi-Tech and Partner Tech are mentioned by sources as Bluetooth car-kit suppliers, but all of these companies, except for Partner Tech, were unavailable or refused to comment on their developments.

Partner Tech confirmed the company is now participating in a big Bluetooth car-kit project, but refused to say anything else, citing client confidentiality.