The steady market share of stand-alone Bluetooth IC market share is being maintained by both traditional device categories which consist of handsets, tablets and PCs, and new growth categories, including wearables, sports and fitness equipment, and smart home nodes.

“End user products such as smartphones and PCs have been shifting away from stand-alone solutions for some time now, and smartphones have shifted to integrated platforms with Bluetooth as well,” said research director Philip Solis. “On the other hand, there is a growing long tail of devices around the Internet of Things that will gravitate towards stand-alone Bluetooth in many cases. The end result is that stand-alone Bluetooth ICs will remain steady in share and grow with the overall market.”

Handsets – smartphones and feature phones – are a dominant part of the Bluetooth chip-set market and will remain so, but to a lesser degree throughout the forecast period. “Handsets comprised 62 percent of the market for Bluetooth ICs in 2013 and this will fall to 53 percent in 2019,” added Solis. This is a big part of the reason why more than 70 percent of Bluetooth ICs will be “smart ready” with a much smaller portion being smart. These trends play into the hands of dominant vendors like Broadcom and Qualcomm, but still leave plenty of room for smaller Bluetooth chip-set vendors. “The IoT will provide additional growth opportunities for all vendors, but while the larger vendors tend to work with high volume customers and products, it is the smaller vendors that will be able to take advantage of the long tail of opportunities.”

Bluetooth has become ubiquitous in end user devices, which has been critical for the growth of the technology in the IoT. However, one of the biggest growth markets for stand-alone and combo Bluetooth ICs – smart home nodes – will also have many competing wireless connectivity technologies. Bluetooth’s lack of mesh networking capabilities (aside from a proprietary implementation from CSR) might put it at a disadvantage against 802.15.4-based solutions.

Source: ABI Research