Cambridge Silicon Radio: Hassle-Free Shopping
By Richard Tomlinson

(FORTUNE Magazine) – In the future mapped out by Cambridge Silicon Radio, life will become a breeze. Here is one scenario envisioned by Phil O'Donovan, a radio engineer who, with two other founding directors, spun off CSR in April 1999 from Cambridge Consultants, a Cambridge, England, technology design firm. You're at the supermarket doing the weekly shopping. Instead of getting in line to pay at checkout, you use a personal bar-code wand to scan each item as you pick it off the shelf. The scanner relays the cost of each item to the cash register, which sends the bill to your mobile phone, which in turn transmits the information to your credit card company.

The magic behind this potential killer app is a special chip, designed by CSR, that's inserted in the shopper's scanner. Called BlueCore, the chip is a trademarked version of Bluetooth, the short-range, low-power radio technology that enables different electronic devices to exchange data without being connected by cables. "Bluetooth is going to be absolutely everywhere," predicts David Cleevely, who runs the tech consulting firm Analysys.

Surveying his own, not especially high-tech office, Cleevely instantly identifies at least ten devices, from the light switch to the water cooler, that he says could benefit from being Bluetoothed. In a world where your fridge will soon be interacting with your Palm to configure that weekly shopping list, there are naturally a host of companies that are riding the Bluetooth express. But there are three reasons CSR might have a head start on its competitors, which include giants like Ericsson (inventor in 1994 of the original Bluetooth prototype), Lucent, and Philips.

First, because BlueCore is a single-chip product, CSR's costs are reduced. O'Donovan says that BlueCore currently retails at $8.50 per chip for a one-million-chip batch. That's well below the $20-plus multichip versions being developed by competitors and within striking distance of the $5 target price set by the Bluetooth industry. Second, and perhaps most important, BlueCore is already on the market. Commercial production was launched in September, and O'Donovan reckons CSR is about nine months ahead of its rivals, which are still testing their products.

That may be hype, but it's a sign of CSR's global ambitions that its newly appointed CEO, John Hewson, a British veteran of the U.S. semiconductor industry, is based in Silicon Valley. It helps, too, that in February, Intel took an unspecified minority stake in the privately owned company.

The challenge for Hewson, O'Donovan, and the rest of the CSR team is to land as many big BlueCore deals as possible before the competition has time to catch its breath. So far there are no firm contracts, but "partnership" agreements (basically letters of intent to purchase) have been signed with Alcatel, the French telecom multinational; Fujitsu Media, a division of the Fujitsu electronics group; and two Japanese electrical-component manufacturers, Tochigi Mitsumi and Alps.

--R.T.