Michael Kanellos reports from the Intel Developer Forum in San Jose, CA; special to ZDNet . . .

Bluetooth has already lost the battle to become the wireless network standard, according to the head of Intel's communications strategy.

Bluetooth — which lets cell phones, notebooks and other devices create wireless networks that can then link to the Web — is not going to become a mainstream technology, according to Sean Maloney, general manager of the Intel Communications Group. Maloney made the comments during a press conference Wednesday at the Intel Developer Forum here.

Instead, 802.11 will emerge as the de facto standard for connecting wirelessly to the Internet.

“802.11 has won. Bluetooth is in full retreat from Moscow at the moment,” Maloney said, alluding to Napoleon's dispirited withdrawal after a bruising campaign in Russia. “It may end up winning but right now it isn't…Bluetooth will survive but it will be a much more niche product than expected.”

To add insult to injury, Bluetooth is even losing ground in Scandinavia, where Norwegian ski resorts are installing 802.11 infrastructure. Bluetooth borrows its name from the 10th-century Viking King Harald Bluetooth, who united Nordic nations under one religion.

Although a number of other executives and analysts have already written Bluetooth's epitaph, Maloney's comments could ruffle some feathers. Intel was an early proponent of Bluetooth and is a principal member of the trade group promoting the standard.

On Thursday, Maloney will deliver a speech on the poor state of the communications business. Communications companies invested far too heavily in capital equipment and installing fiber in the past few years. But, instead of picking up, business has declined.

“I don't see a recovery,” he said. “Of all the alcoholic binges that occurred in the high-tech industry, the communications industry had the biggest party and hence has the longest hangover.”

Still, opportunities exist. Despite the massive investment by carriers in infrastructure in the past few years, the public still yearns for more bandwidth. There is more Internet traffic today than before the economic downturn a year ago.

As a result, carriers will have to continue to invest in networking equipment. Intel's strategy is to offer general-purpose semiconductors to network equipment makers that are cheaper than the custom chips these manufacturers have used for years.

The downturn has also made acquisitions less expensive.

“There are a lot of people on the block, and they are a lot cheaper than they were yesterday,” he said.

 
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