Bluetooth Seminar

1. Bluetooth Seminar Università degli Studi di Milano May 25, 2004

2. Seminar Agenda • Accenture Presentation 15’ • Bluetooth Technology and Market overview 30’ • Bluetooth at work: Micropayments concepts 30’ • Questions & Answers 15’

3. Seminar Agenda • Accenture Presentation 15’ • Bluetooth Technology and Market overview 30’ • Bluetooth at work: uCommerce concepts 30’ • Questions & Answers 15’

4. Who is “Bluetooth”? • Harald Blaatand “Bluetooth” II • King of Denmark 940-981 • Ericsson erected this Runic stone in hometown of Jelling • Harald is holding a mobile phone and notebook • Harald united Denmark and Norway • Harald brought Christianity to the Danes

5. What is Bluetooth? • Bluetooth is not a company • Wireless RF standard • Radio System • Hardware • Software • Interoperability requirements • Commitment from over 2,100 companies • Operates in 2.45 GHz unlicensed frequency

6. Who is promoting Bluetooth? The Bluetooth SIG (Special Interest Group) 9 Promoters 182 Associates 2100+ Adopters IEEE 802.15 WPAN = Bluetooth

7. Application Layer Presentation Layer Session Layer Transport Layer Network Layer Data Link Layer Bluetooth Physical Layer Architecture Bluetooth & Open System Interconnection (OSI) Model

8. Core Capabilities • Bandwidth • 721 kbs realized maximum data transfer • Simultaneous voice and data transmission • Support up to 7 connected devices • Piconets and Scatternets • Power • ‘Client devices’ - 2.5mW @ 10 meters • Interference • FHSS on 1600 Channels • Security • PIN and 128 bit key

9. Interference Interference • Bluetooth supports Frequency Hopping Spread Spectrum (FHSS) • 1600 channel hops/sec on 79 channels • Avoids interference better than 802.11b that supports Direct Sequence Spread Spectrum (DSSS)

10. Security Key elements to Bluetooth security framework • Frequency hopping – helps prevent a third party from “listening in” on a communication between two devices (1600 hops/sec over 79 frequencies) • Security entities • Unique device identifier – 48 bit address • Private authentication key (128 bit) • 128-bit random number (frequently changing) • Private encryption key – 8-128 bit • PIN • Link Key (128 bit) • Used for authentication • Parameter for deriving encryption key • Each packet uses a different encryption key pair • If one packet is cracked, a new packet 625ms later • Due to national restrictions, keys may be shorter than 128 bits • Additional application-level security can be implemented

11. Initial Hype • World Peace • Huge markets overnight • Today’s Reality • Many players • Interoperability issues • Poor quality Expectations and Reality What should the mobile device do at the beach?

12. Ubiquitous Networked Standalone Bluetooth Adoption History 1.5b Devices $5/chip Q3 2001 2003 2006+ Time

13. Common Issues • Sometimes, it just doesn’t work • Low bandwidth for some applications • Interoperability • Crowded RF Spectrum

14. Wireless Standards High performance, higher cost 100000 WLAN 802.11 • No solution can fill all needs • Complementary devices and technologies WPAN 802.15 Bluetooth 10000 1000 User Data Rate (Kbits/s) 100 10 RFID 1 10 100 Low performance, Lower cost Range (meters)

15. 802.11b & Bluetooth What should the mobile device do at the beach? Bluetooth 802.11b • Applications • WLAN • Applications • Intercom, Headset, LAN, Car • Characteristics • Bandwidth • Power • Chip cost • Interference • Mature (3rd Gen.) • Characteristics • Discoverable Technology • Bandwidth • Power • Chip cost (theoretically) • Interference • Very Immature

16. RFID vs. Bluetooth RFID is gaining acceptance as a quick, convenient payment option, mostly in fast service industries (gas stations, fast food restaurants). • Bluetooth can be positioned in similar industries to serve multiple back office payment systems. More payment options are available with Bluetooth and the user is not constrained to ‘one device, one payment system’. • Bluetooth devices can easily be updated to add retailers that were not originally associated to the user. • Sign up for service via RFID requires the mailing of the RFID hardware needed before the quick mobile payment method is available for usage. Bluetooth sign up and initialization would be more efficient because the user’s mobile device would act as a unique identifier. Both options assume you carry the RFID or mobile device at the Point of Sale. • Bluetooth could facilitate the use of online payment systems, such as, Qpass or Paypal, and therefore not add another back office system. RFID uses a payment method connected to the proprietary RFID reader system. • RFID has a short transmission range and requires more proprietary hardware readers to cover the service area. Bluetooth has a larger range, 10 meters (100 meters with power boost), to easily cover required service areas. However, this may cause other usability issues for Bluetooth. • RFIDs require more equipment than necessary to conduct a transaction and are only useful at participating vendors. Each Bluetooth device has the potential to be used as a payment/identification vehicle.

17. 3G & Bluetooth • Lowering the Price of Admission to High BandWidth Services • Traditional Carriers • New Competitors • Defining Characteristics • Licensed vs. Unlicensed RF Bands • Location Based Services vs. Proximity Based Services

18. Global Impact • Market Sentiment • Europe and Asia Ahead • US Lags

19. Industries In the News • Hospitality • Starwood, Holiday Inn, Venetian Resort, Classwave, Registry Magic • Airlines • SAS, Sabre, Bluetags • Retail • Strio, Classwave • Automobile • Nokian Tyres, Clarion, AMI-C, Zucotto • Communication • O2, BT, AT&T Wireless, Vodafone, Orange, Taiwan Cellular and Telefonica del Sur (Chile).

20. Seminar Agenda • Accenture Presentation 15’ • Bluetooth Technology and Market overview 30’ • Bluetooth at work: uCommerce concepts 30’ • Questions & Answers 15’

21. Introduction Video • Launch the Video of the Mobile Service Link Prototype

22. What is “uCommerce”? Extending eCommerce beyond the static terminal of the PC to anytime, anyplace, anywhere

23. What does “U” mean? • Untethered – Not constrained by hardwires of traditional computing • Ubiquitous – Taking place where a person wants • Unbounded – Not limited to traditional definition of commerce

24. Bluetooth + uCommerce • Originally created as a cable replacement system by Ericsson • Capable of much more • Allows commerce and applications to be placed in once inaccessible places • Enables the uCommerce vision of anytime, anyplace, anywhere through proximity based computing

25. Internet Micropaymentsto the Real World • Imagine you can pay for beverages from vending machines, taxi fares or even supermarket shopping using your mobile phone • Imagine, as well, that the vending machine products and prices all appear automatically on your mobile’s display, so that all you have to do is type in your secret PIN code to authenticate the transaction. All products in the future could be customised to “hijack” your mobile phone as their interface to offer you services as you walk within range • All purchases and payments remain simple and secure and, more importantly, you don’t need to carry loose change around any longer. You don’t need to collect separate bills either, since your payment provider will send you a detailed bill at the end of the month

26. Internet Micropaymentsto the Real World • The following two slides describe two variations of an architecture that could enable this concept using today’s existing and emerging technologies: • the first variant is based on SMS over GSM and is currently restricted to European implementations • the second variant makes use of the Internet as a globally available communications medium. • Let’s see how Internet micropayments can be ported to the real world...

27. Consumer’s bank account 8 7 5 4 3 2 1 6 Payment Provider Internet Micropayments to the Real World - Architecture (1) Bluetooth-enabled vendors Payment Provider bills Consumer Mobile phone transmits grant of payment via Bluetooth to Vendor Vendor and Payment Provider settle bills at the end of each cycle SIM Toolkit Application on mobile phone sends SMS with transaction information through Network Operator to Payment Provider Taxis VendingMachines Supermarkets & Stores Vendor device advertises its offer via Bluetooth to mobile phones in range and transmits its public key for later encryption Billing (either prepaid or at end of cycle) Payment Provider sends grant of payment encrypted with Vendor’s public key via SMS Settlement Payment Provider logs transaction and adds it to the consumer’s bill or deducts consumer’s prepaid account Advertising & Public Key Bluetooth Encrypted grant of payment Consumer selects article and authenticates with personal PIN code Encrypted grant of payment SMS over GSM Summing up or deducting from prepaid account Selection & Authentication Transaction Info & Public Key Consumer’s mobile phone

28. 1 8 7 3 5 4 2 6 Internet Micropayments to the Real World - Architecture (2) Vendor and Payment Provider settle bills at the end of each cycle Bluetooth-enabled vendors Settlement Payment Provider Encrypted grant of payment Mobile phone transmits selection and authentication information via Bluetooth to Vendor Summing up or deducting from prepaid account Internet or GPRS Taxis Authentication Request: Transaction Info & Public Key VendingMachines Payment Provider verifies request and sends encrypted grant of payment back to Vendor via Internet or GPRS Payment Provider logs transaction and adds it to the consumer’s bill or deducts consumer’s prepaid account Supermarkets & Stores Vendor device advertises its offer via Bluetooth to mobile phones in range and transmits its public key for later encryption Billing (either prepaid or at end of cycle) Advertising & Public Key Bluetooth Accept Transaction and authentication information is sent via Internet or GPRS to Payment Provider Payment Provider bills Consumer Consumer selects article and authenticates with personal PIN code Selection & Authentication Consumer’s bank account Consumer’s mobile phone

29. Real World Service Portal • Imagine you can virtually meet up with a ‘new-friend’ who lives a long way away, using the Coke machine around the corner. • You select a beverage from your mobile phone's menu and type in your secret PIN code to authenticate the purchase. Subsequently, your phone prompts you to enter the name of your friend. Within seconds the vending machine connects you to a vending machine on the other side of the world where your friend is also enjoying a drink and you can both talk for free, enjoying the refreshment of your cold drinks. All you have to do is stay within 100 metres of the vending machine. • Let’s see how a real world point of sale can turn your mobile phone into a service portal...

30. Bluetooth-enabled Vending Machine Real World Service Portal - Architecture Bluetooth-enabled Vending Machine Voice over IP Communication Internet or GPRS Transaction Authentication & Settlement Transaction Authentication & Settlement Vending Machine advertises its offer via Bluetooth to mobile phones in range Summing up or deducting from prepaid account Payment Provider first sums up micropayments or deducts them from prepaid account, then settles with Vendor and bills Consumer at end of cycle. Vending Machine transfers authentication information over Internet or GPRS to Payment Provider. Upon reception of grant of payment it releases the purchased good and connects the consumer via Voice Over IP to the consumer at the other vending machine Billing Advertising & provision of free communication Bluetooth Bluetooth Provide free communication Purchase Selection and authentication Consumer selects to buy and partecipate to the meeting, authenticates and choices sex,age of communication participant Consumer’s mobile phone Consumer’s friend’s mobile phone Consumer’s bank account

31. Seminar Agenda • Accenture Presentation 15’ • Bluetooth Technology and Market overview 30’ • Bluetooth at work: uCommerce concepts 30’ • Questions & Answers 15’

32. Seminar Agenda • Back-up slides

33. Protocol Stack Bluetooth Protocol Stack Applications TCP/IP ATcom OBEX PPP TCS RFComm SDP L2CAP HCI Audio Link Manager (LM) Baseband Bluetooth Radio

34. Protocol Stack Definition

35. Alternatives to Bluetooth

36. Ad-hoc networking • Piconet • 1 master, up to 7 active slaves • Up to 255 inactive slaves • All devices in a piconet hop on same pattern • Scatternet • Scatternet = 2 or more connected piconets • Master or slave device can be connection • Piconets in scatternet are not sync-ed to same hopping pattern

37. Slave Slave Slave Master Slave Slave Slave Slave Bluetooth Piconet

38. Slave Slave Slave Slave Slave Slave Slave Slave Master Master Slave Slave Slave Slave Slave Slave Piconet Piconet Master Slave Slave Slave Slave Piconet Slave Slave Slave Bluetooth Scatternet

39. Cordless Phone Mobile Phone PDA Laptop PDA Internet Access Point Access Server LAN (Ethernet) Bluetooth Network Access Point