Cambridge Silicon Radio is getting ready to deliver a single-chip Bluetooth product to customers by September at a price per chip at least half that of current analysts' estimates.

Bluetooth is a wireless PAN (personal area network) standard aimed at enabling a wide variety of devices (including mobile phones, PCs and handheld computers) to exchange digital voice and data over short distances using low-power radio signals.

The first Bluetooth-enabled devices are due to become generally available in the fourth quarter of this year.

Analysts currently price Bluetooth chips at between £13 and £17 with the cost not expected to drop to the £5 range until 2004 or 2005.

CSR, however, claims it will be able to deliver its first product, the single-chip BlueCore01, for around £5 for volumes of one million units per year.

The BlueCore01 chip is also smaller than those of its rivals, according to a CRS spokesman, estimating that the processor is four-tenths the size of a Bluetooth module from Ericsson.

In Europe, Bluetooth will initially feature most strongly in mobile phones.

Given the stringent legislation in some European countries related to hands-free driving, CRS believes that Bluetooth-enabled headsets will prove popular as cheap alternatives to expensive car phone cradles.

Under the right conditions, a driver could place a cell phone anywhere in the car and connect to it via the BlueCore product and a wireless headset.

In the U.S., by contrast, Bluetooth is likely to catch on more in the PDA market.