By Morten Andersen*

Oops, the memory of your digital camera or WAP mobile phone is full. Well, just push a button and transfer the data to your pc. No cables or interface devices needed.

This is one of many possibilities inherent in the Bluetooth Wireless technology. A few years back a vision. Today incorporated in hundreds of products. 28 million Bluetooth units were shipped last year and forecasts for 2003 are three times as high.

"Since the first product came in 2000 it has all been about growth. Both in volume and in the number of products available", says Maria Khorsand, president of Ericsson Technology Licensing, a separate company within the Ericsson group.

The company's headquarter is located in the science park IDEON in the Swedish city Lund, close to the Øresund coast.

"Bluetooth was invented here by people connected to what was formerly Ericsson's consumer product division. Our company is still built around the same group", Maria Khorsand explains.

Just recently the company has decided to concentrate its Bluetooth R & D in Lund.

"On the sales front we have offices outside Lund, mainly with a focus on US, Korea and Japan, but when it comes to development we believe in concentrating the efforts. And obviously we chose Lund, where the heart of the Bluetooth technology lies", Khorsand says.

Old Harald

Next to the entrance door you find a piece of rock looking familiar to anybody who has ever attended classes at a primary school at the other side of Øresund, namely in Denmark. This stone was raised by Ericsson in memory of Danish 10th century king Harald Bluetooth. In style it reminds of the famous "Jelling-stone" which Harald ordered decorated with inscriptions in memory of his parents.

Old Harald united his kingdom, including the nowadays Swedish part of the Øresund Region, just like the Bluetooth technology joins IT devices like mobile phones, headsets and printers to portable and stationary pc's.

"The name came about a bit by chance but has proven to be a smart move. Everybody just have to check what’s behind it", Maria Khorsand says.

Not only the name and the technology are smart. Ericsson Technology Licensing has set up a unique business model allowing it to team up with a broad variety of other players.

"Back in 1998 it was realized that this was by no means a niche product. It had the potential for mass production, but we couldn't make that happen alone. Thus Ericsson took the strategic decision of sharing its know-how with the companies that "make the market", explains Khorsand.

Amongst the partners are Ailocom, Arima, Infineon, Intel, National Semiconductors, Philips Semiconductors, Samsung Electronics, ST Microelectronics and VIA Technologies.

Scandinavian model

The partners license Ericsson’s Bluetooth design solutions and the company in Lund gets a combination of up-front fees and royalties.

"So our revenue grows when our customers’ revenues grow", Khorsand says, underlining that her company remains focused on development:

"We are not making chips or consumer products, but we are holding on to the core technology. At the same time our business model includes keeping in touch with our customers and helping them implement the technology in their products".

The model obviously requires a great deal of mutual trust. According to Maria Khorsand the Scandinavian background of the company might be an advantage:

"In the beginning some of our customers were a bit uncertain about our business model. They were wondering if we were actually thinking about moving into producing, say, chips ourselves. But by now they realize that the model is really complementary".

The openness even expands to allowing competitors to come and verify their products at the facilities in Lund.

A basis for recruitment

Whereas the mobile phone industry generally has had to decrease its number of employees during the last few years, Ericsson Technology Licensing has moved its external sites to Lund to concentrate its research and development in the area.

"Mobile phones are the main segment driving the expansion of Bluetooth, but we have not been affected by the hardships of that industry. You may see a decrease in the volume of sold mobile phones, but at the same time you see a large increase in the number of phones with Bluetooth", Maria Khorsand explains, noting that other segments, such as PDA's and headsets, are beginning to break.

The company now employs 180 people, mainly developers. "We are enjoying a location with several universities giving us a good basis for recruitment".

Quite a number of the companies that have adopted Bluetooth are located in Lund. With a reference to Californian Silicon Valley Maria Khorsand smiles:

"We like to speak of this part of Lund as "the blue valley"".

More information: Ericsson Technology Licensing

This article was originally published by Øresund IT Magasine (Spring 2003). You can download the magazine in PDF format on Publications.

*Morten Andersen is a Danish journalist living in Copenhagen.