Intrinsyc Software International Inc ISYRF

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3. BLUETOOTH NOT READY FOR PRIME TIME At last week’s wireless industry conference in Hanover, Germany, event coordinators thought it would be a good idea to demonstrate a live Bluetooth-enabled wireless network. (For those of you who haven’t heard of it before, Bluetooth is a new technology that allows electronic devices to communicate with one another without the use of wires.) The idea was to create a Bluetooth network within the convention hall to enable attendees to seamlessly connect their laptop computers, PDAs (personal digital assistants) and mobile phones. When the network failed to operate as planned, however, the experiment created a torrent of negative publicity. Adding more fuel to the fire, Microsoft (MSFT, $53, down 4) last week said it would not support Bluetooth on future versions of its Windows operating system. Though there are alternative operating systems for running mobile digital products, Microsoft’s lack of initial support was seen as a negative for the new technology. COMMENT: This was supposed to be a breakout year for Bluetooth. Motorola (MOT, $14, down 1), Nokia, and select chipmakers gave investors some hope in recent months when they unveiled Bluetooth-enabled devices. The problem, however, is that these new products were developed before the industry could settle on a unified standard. This has led to compatibility and performance issues that have helped cast a doubtful shadow on the technology. As we’ve stated previously, snafus should be expected with any new technology. Unfortunately, the timing and magnitude of the problems associated with Bluetooth and other 3G-related technologies couldn’t be worse. Current market conditions have certainly magnified the impact of these issues on wireless sector valuations in recent months. It’s also hard to fathom how last week’s live demonstration was allowed to proceed without first proving itself in a few test trials. A conference hall is an easier environment for deploying a network than an actual field installation, which certainly casts further doubt on whether or not this cutting-edge technology is really ready for widespread use.