Headsets Enter the Blue Period

By Tara Seals

THE HIGH-MARGIN WIRELESS

sale is back, thanks to headsets that wirelessly connect with devices using the Bluetooth standard. Spurred along by hands-free driving legislation and an explosion of styles and designs, Bluetooth headsets now are gaining massmarket popularity, and presenting a big opportunity for dealers.

Today, 30 [percent] to 40 percent of handsets ship with Bluetooth enabled on them, says Scott Martin, head of global marketing for MobileMe at Motorola Inc. Among those, there is a 30 [percent] to 40 percent attachment rate for Bluetooth devices, mostly headsets. What started as something for the techno-elite and businesspeople on the go has become something headed for the mainstream.

Indeed, according to Strategy Analytics, 6 million Bluetooth headsets were shipped in 2005, and that number is expected to almost double, to 11.9 million, for this year.

As the demand grows, so do the vendors. And because the Bluetooth technology is a universal standard, any Bluetooth headset can be paired with any Bluetooth-enabled device; thus extensive interoperability testing on the part of handset manufacturers as well as third-party accessory companies is the norm. As a result, a potential user has a staggering array of choices.

A few of the variables include: Short boom, long boom, no boom; pen-style or over, behind or inside the ear; color and weight; plus performance metrics such as echo cancellation. Plantronics Inc. offers features like WindSmart, which is a small rigid plastic ball that eliminates wind noise when talking outside. Also, some headsets have digital signal processing, which measures noise levels in a particular conversation and blocks any sounds outside the norm, such as a siren or a car honking. There is also a difference in the version of Bluetooth thats embedded: v.1.1, 1.2 or 2.0, with the later versions offering better audio quality and faster data transfer rates.

Enter the wireless dealer. While its possible to purchase accessories via Web sites and catalogs, most people still prefer to talk to someone about their options. Dealers can get involved easily most carriers offer a range of devices from their handset partners and third parties, and many manufacturers have their own distribution channels.

Its definitely an assisted sale, says Jack Reynolds, director of product management for Plantronics mobile group. The biggest opportunity for channel partners is that its not the easiest task to determine which product fits which user type with which features. It helps to have a hands-on approach. Questions to ask include, Where will the headset be used? With which devices? Business or pleasure? Someone looking for a headset to use in the office and car would need fewer performance features than a person who does a lot of walking in Manhattan, for example. Also, How much will the customer be using the headset?

Talk time and standby times vary with each model, says Pedro Sanchez, director of the accessories business at Sony Ericsson Mobile Communications AB.

The headsets functionality is not limited to use with cell phones, either. iPods and other MP3 players are Bluetooth-enabled, as are many PCs and laptops and even some stereos and televisions. Bluetooth headsets can do double duty as a VoIP headset for online gaming or softphone as well function with a cell phone. Most Bluetooth headsets can pair with up to eight devices, although they cant simultaneously connect to two devices. If a user wants to use it for VoIP, he or she would need to turn off the cell phone if its within range of the headset. That said, multipoint systems are now emerging (from Motorola, for one) that allow simultaneous connections, so a user can toggle between two devices and may eventually be able to simply roam around and use the headset seamlessly as needed.

Setup simultaneous connection-enabled or not requires going through a pairing procedure so that the devices are recognized automatically, often including password setup and other configurations. Salespeople also need to be able to guide the consumer through the setup and operation of the headset even though its very simple, says Sanchez.

There are also innovations in the market, like Motorolas RAZRWIRE sunglasses/headset combo product in partnership with Oakley, or the Burton Audex Cargo jackets with Bluetooth built in. This technology can appeal to audiences you never would have in the past, says Martin.

Sony Ericssons newest headsets automatically pair with Sony Ericsson phones, avoiding the need to enter complicated passcodes. The manufacturer also soon will offer the HCB-100, a hands-free car kit that needs no installation. This is key because car kits can cost several hundred dollars to professionally install and uninstall, says Sanchez. Outside the car, this nifty device also functions as a speakerphone if you need to have an impromptu conference call with multiple parties.

While guiding a customer through the Bluetooth waters can take time, the extra sales effort pays off. These accessories are a really good margin stream, and thats important because the phones themselves can be low margin, says Reynolds. Headsets offer a great upsell, or aftermarket opportunity, and people usually come back to buy the next generation thats available, just like with phones.