A colleague keeps taunting me whenever I bring up Bluetooth. In his mind, Bluetooth is a nice technology that helps people unwire their headsets from their mobile phone, but that's about it. Any type of actual connectivity for real devices is the job of wireless LAN technologies (also known as Wi-Fi).

So I'd be curious to see his reaction to a recent report from ARC Group, which says that shipments of Bluetooth smart phones will reach 87.5 million units - about 70 percent of the smart phone market - by 2009. This compares to WLAN smart phone shipments, which the group predicts will only reach 18.75 million units by the same year.

The report says WLAN technology "does not yet offer an ideal solution for being incorporated into smart phones."

WLAN: Big chips that cost too much
The price of building WLAN into a smart phone is still very high, making it harder for carriers to subsidise them and creating a higher price for the end user. WLAN modules are also bulkier than Bluetooth modules, as the WLAN modules include extra components for signal shaping and power amplification, ARC Group says.

Embedding a WLAN module into a smart phone that already includes a bulky 2.5G/3G wireless module complicates the design process and results in a larger device, and also affects the device's overall power consumption. The report says smart phones already suffer from high energy drain from the 2.5G/3G wireless modules.

Furthermore, putting WLAN into a wireless WAN device is not yet justified, the report says, because WLAN to wireless WAN (cell-phone) roaming systems are still in their infancy and service providers need time to adopt the technology. Carriers seem to be waiting to see whether enterprise WLAN adoption and public hot spots are legitimate.

"Microsoft and Intel are the main supporters of including WLAN in smart phones, as Microsoft operating systems have already integrated WLAN stacks, and Intel xScale processors come with a WLAN interface," said Malik Saadi, senior analyst with the ARC Group. Some handset vendors have incorporated WLAN into devices, (NEC, for instance) but at the very high end.

WLAN is a US preference
The technology debate between Bluetooth and WLAN still appears to fall down geographical boundaries. In Europe, and Japan, Bluetooth dominates, while in North America and other parts of Asia Pacific the preference is for WLAN. Like the preference for SMS vs. instant messaging, this could be a debate based on the infrastructure that each population has, and not necessarily a preferred preference of one technology over the other.