How Apple iBeacon Will Transform Local Commerce

Posted on: October 1, 2013
Posted in Mobile, Strategy

One fascinating benefit of today’s converged hardware / software platforms is how a new technology can be “turned on” via OS upgrades, allowing instant network effects at the platform and ecosystem level. Apple’s iBeacon is a model case for this and below are some thoughts on how new capabilities brought forth in iOS7 have the power to transform local and retail at the point of sale.

  1. iBeacon was announced at Apple’s WWDC in June and is part of iOS7. The magic of Apple iBeacon stems from it being an open standard—Bluetooth 4.0 (BTE) has been inside most smartphones for 2+ years (for Apple, dating to the IPhone 4S). Bluetooth chips have grown leaps and bounds in terms of capabilities and efficiency in recent years and will continue to get smaller and cheaper. Today, a beacon can last 2 years with a low power ARM processor running on a watch battery, even when the device is constantly broadcasting to everyone around it.
  2. Beacons can take any form factor and can be placed anywhere. From a developer perspective, they simply advertise data in peripheral mode by broadcasting a unique identifier. App developers then use this to understand the location of your device and connect you to a service or to content in the cloud.  Apple integrates iBeacon into CoreLocation (nothing to do with the old Core Bluetooth framework).  Beacons sit back and broadcast. The discovery, handshaking and communication are all handled by Apple.
  3. People compare Bluetooth and the now-defunct NFC—but use-cases like range sensing show how superior Bluetooth is and why Apple chose it. BTE also has forward proofing built in—today’s chips are so advanced they have built-in support for over the air (OTA) firmware updates.1. This is a big deal and means beacons can be updated  after being deployed. New firmware can be broadcast to the beacon to enable things like battery saving intelligence—e.g, it’s possible to turn off a beacon at night (if inside a store) to make the battery last longer, or download system upgrades and security patches.
  4. Additionally BTE allows the concept of ranges—near, medium, and far under iBeacon.  This enables distinctions to be made based on distance, enabling both geofences as well as true proximity-based services (touching your iPhone against something). iBeacon and Bluetooth will enable geofencing that is much more granular than today’s location technologies (GPS + WiFi). But another of the less talked about use-cases that is super compelling is indoor navigation.
  5. Retailers will be able to easily arrange multiple beacons (3 or more) to do triangulation. This allows rough indoor navigation for less than $100 today (much less in the future). Why would retailers not consider deploying beacons when every single person with an iPhone can be marketed to?2 Indoor navigation is very interesting to Google, and they have been playing with indoor Maps for years. So—though beacons are more about proximity and context than trying to locate position precisely, both may be interesting to Apple and Google for different reasons.
  6. Indoor navigation can go way beyond traditional geofencing, which simply senses presence—for example, placing  15 beacons every 10 feet apart could create a mesh network, with each beacon transferring different IDs to the phone and to each other. This would allow the network to detect you with a high level of precision indoors. One of the keys for using beacons like this will reside in being able to update them after deployment to a later firmware via OTA updates. Market leaders like Estimote are already thinking this far ahead, so deployments made today can be extended for years as new software features are devised at the app layer.
  7. Getting all this to work will require a lot of thought at the platform level, which is why Apple has a big edge. iOS can allow you to use CoreLocation to wake up the app with WiFi and GPS, and then the app will discover nearby beacons, at which point they will communicate with the app / user directly—so the app won’t stay in the background wasting power (iBeacon can wake up apps but only after beacons have registered). Apple also has a new framework called  CoreMotion that takes advantage of the M7 processor to do granular level precision. Android will struggle wildly to get this level of control neatly exposed for developers. Because consumers don’t want apps to just ping their phone, and because location services are battery killers, a neatly exposed developer toolkit is crucial—devs aren’t going to adopt iBeacon unless consumers see the value and their smartphone batteries don’t die. When used in unison, all of Apple’s APIs will really propel developers to build creative things. MLB recently deployed a trial based on iBeacon which showed ticket-holders a map to their exact seats once they’d entered the park—amazing.
  8. Interestingly, Apple’s push into iBeacon could enable it to run away in this market while still standardizing on a completely open platform and developer environment. Apple often gets wrongly derided for being closed—but as I mentioned in point #7 in this post on iOS and Android, fragmentation issues in Android will guarantee that only a minority of Android phones (best estimate is 30%) will support a beacon-like system 12-18 month from now. This is bad for Android, but Apple didn’t have to do anything “closed” to create this gap—iBeacon is standardized around 100% open technologies.
  9. All this begs the question—does Apple have a local strategy? In my opinion, yes. And does this strategy have the capability to change the way merchants think about local? Yes. iOS7 and iBeacon create an ecosystem-wide network effect overnight, with standard technology, offered in an open development environment.  It’s very clear that Apple is starting to put the pieces together to allow consumers to make offline transactions with their device—imagine being in a store and authorizing a payment with your fingerprint and never talking to a salesperson. All Apple has to do is open its payment APIs to get to this level, the rest of the stack is already being exposed.
  10. It’s a sure thing that retail will transform over the next few years with the help of mobile platforms. Apple and Google will push these technologies. And developers will embrace them. Proprietary solutions will go away. Google already backed away from NFC. Another example of this is Shopkick. They were early with a proprietary solution that has seen success, but iBeacon will eclipse this almost immediately. Retailers won’t use Shopkick because they can integrate iBeacon into their own apps, and the company will have to adopt to this technology or be left behind.

Overall, one thing is clear: mobile platforms are set to change the way we buy, transact and consume in our local environment.  Local commerce is a massive carrot for growth, a $1 trillion opportunity in the US alone. And somewhat ironically, it may end up being Apple’s “closed platform” which helps unify how online to offline commerce evolves, while fragmentation within Android actually slows adoption of these technologies down.


  1. Broadcom, the company with the biggest leadership position in Bluetooth, is one of the top SoC companies in the world and understands networking deeply. They exemplify how the intersection of embedded networking and mobile technologies have accelerated mobile platform innovation at a velocity past anything that PCs / traditional computing ever witnessed 

  2. opt-in only, and dependent on the consumer downloading and authorizing an app. 

  • http://gravitationalpull.net/wp/ ampressman

    Can’t Google use its carrier-bypassing services app to add this capability to any Android phone with BTE? http://arstechnica.com/gadgets/2013/09/balky-carriers-and-slow-oems-step-aside-google-is-defragging-android/

  • Walt French

    “Local commerce is a massive carrot for growth, a $1 trillion opportunity in the US alone.”

    A website claims the DoJ reports $6 billion of credit card fraud. Wikipedia says 0.07% of credit card purchases are fraudulent. A vendor claims $190 billion (19% of a $trillion). That’s with existing anti-fraud steps, which may not work so well with new transactions.

    It seems stores will also want authentication technologies to go with these new transaction modalities; being able to query a phone and get back a secure, “the user ‘WaltFrench’ is authenticated” seems like a necessary complement to the location services.

  • http://www.passjoy.com/ Jim Bonner

    Steve, great rundown.

    We’ve done some experiments with iBeacons together with the new-and-improved iOS7 Passbook and found the the combination is dynamite. Much more powerful that they appear at first glance.

    Many retailers feel their branded retail apps have been slow moving. Passbook and iBeacons supercharge those apps.

    I predict internal mobile developers are going to have more clout in old-time retail organizations.

    • http://stevecheney.com/ steve cheney

      Love this comment. Truth. Thank you for reading.

  • dang1

    very tough for iBeacon to transformative when iPhone is only around 15% of smartphones

    • rattyuk

      And yet lack of support for NFC from Apple has effectively killed it.

      There is a fundamental disconnect between people quoting low market share for iPhone and the facts that usage share is so damned high.

      America is a large place and once the tech is in place it will roll out across the globe. Don’t ignore the fact that in the US Apple have a far larger share of the mobile market than the number you quote.

    • Nate

      40% and growing in the US.

      http://www.nielsen.com/us/en/newswire/2013/whos-winning-the-u-s-smartphone-market-.html

      Enough to matter to retailers, especially with the claims we’ve heard that iPhone users are supposed to be higher spenders.

    • ebernet

      Maybe 15% penetration (higher in the US) but iBeacon is on close to 90% of the devices (iPhone 4s or better running iOS 7 or better). Contrast that to Android, where figures of those devices shipping with NFC have yet to approach the number of iOS installed devices that are iBeacon capable, and those that do ship with NFC don’t all have the required infrastructure to use NFC…

      • Andrew

        Can someone tell me what the retailers, banks, telcos, transport governments, handset makers, payment issuers, etc are going to do with NFC then if they have invested billions in commercialising and rolling out this tech for their services?

        85% of people don’t own iPhone. Samsung global smartphone market share = 32% more than double that of iPhone. High usage of iPhone users was definitely true 12-18 months ago but new Samsung & co devices plus more active non iPhone developer community shows this is not holding up anymore.

        Beacons will play role no doubt, but will be niche vs broader more mass market play like NFC.

        • http://stevecheney.com/ steve cheney

          Billions of sunk costs mean nothing. NFC is already dead, and Google abandoned it. This has been known for almost a year.

          • Andrew

            So Isis and Sprint wallets and over 1m nfc pos terminals also dead? Seems really odd. How will Tesco, Walmart, etc use Beacon to pay at POS?

          • eftcomms

            With BTLE to NFC conversion, or course.

          • Andrew

            More examples of markets investing in NFC http://bit.ly/GNnX8i this time Hong Kong.

            Last time I heard Google still heavily involved in NFC otherwise why are they putting it in their Motorola devices? Seems odd that they abandoned it but still have NFC included….

          • Mollejuo Software

            Steve,

            It’s understandable your enthusiasm for iBeacon, however to declare NFC dead is a long shot. If NFC is dead -as you proclaim-, would you mind expanding on why Tokyo subway uses it for they ticketing system?

            http://www.youtube.com/watch?v=AOLFW6ed4jA

            And yes, they use their phones enabled with NFC to pay for their ticket.

            The same can be said with Montreal metro, which uses RFID technology (NFC compatible) for they ticket system. While the Montreal metro (among many others) don’t use NFC for they ticketing, technically there’s nothing stopping them from doing it. And of course, this system is relatively new, so no change for it in the years to come.

            Just saying.

            Yes, iBeacon could be very popular, however that doesn’t mean NFC doesn’t expand as well.

            Cheers!

          • Andrew

            Steve – do you really think NFC is dead? Why are governments, retailers, banks, teclo’s around the world deploying NFC led solutions for payments, ticketing, and other related services around the world?

            It just seems really odd that a “dead” technology would be deployed at such a large scale by industry and governments?

            Why are OEMs still shipping millions of phones with NFC?

            Cheers,
            Andrew.

          • Andrew
      • Andrew

        Hong Kong just announced NFC ticketing http://bit.ly/GNnX8i More examples of markets and industry investing in NFC or what you call “sunk costs”….

    • echamberlain

      Given the fragmentation of the other platforms, it is the largest homogenous platform. Nothing is preventing iBeacons from working on non-iOS platforms. Why wouldn’t one want to start on a single platform with 15% marketshare?

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  • Andrew

    Apple and the iBeacon myth; http://bit.ly/1c2Wi0j

    • ebernet

      More believable if it came from a neutral source rather than a company that makes NFC gear. May be true, but source is useless and the points are questionable…

      • Andrew

        Source is useless and points are questionable? It’s reality and those are pure facts. Sometimes facing reality is difficult but it’s better than ignoring.

        Am sure there will be a place for Beacons.

    • echamberlain

      iBeacons are for more than payment. NFC requires extra hardware on the device and has fewer capabilities.

      • Andrew

        So what happens to all the nfc terminals and transport services using NFC globally? Do retailers banks telcos etc just change everything over to Beacons??

        How will you pay at Tesco or Walmart with Beacon v NFC? Do Tesco just uograde their terminals and pos systems?

        • Pointebasic

          Andrew,

          I think you are making it a little more complicated than it is. You’re framing it as an either or proposition and it is not. Wouldn’t these companies merely add a “beacon” near their existing POS systems? Small businesses are already deploying very cost effective iPads (or Android Tablets) as their POS systems, which already include BLE

          You write in your article (assuming you are the Andrew who wrote “Apple and the iBeacon Myth”) “especially when Apple share of smartphones globally equate to 14% (Gartner 2013) vs. handset manufacturers that are including NFC in their models make up the remaining 86%.” You imply that the 86% of the smartphones include NFC, which you know they do not. Wouldn’t it have been more truthful to state ‘Apple has 14% (with BLE) vs XX% of phones shipped with NFC’? But I don’t think any one knows how many phones have shipped with NFC, since almost no OEMs besides Apple regularly reports Phone sales numbers.

          So while No one knows for sure, Apple does not seem to be interested in deploying NFC. Looking forward the all iOS devices, Windows phones and the upper end of the Android market will certainly include BLE. Shortly a majority of all smartphones will have BLE. Re-red that sentence. Consumers with those phones will be the Smartphone users retailers care about.

          One advantage of the BLE is the range. Just because it can reach up to 50m doesn’t mean it has to trigger an event at 50m, it can instead be used only in close proximity 5cm only. Apple has already implemented this with their tap to set up the Apple TV with your iOS device (I believe this is what they are doing, but haven’t verified)

          You are right NFC and BLE both will have a place in the market. I think relegated BLE to niche status is a bit short sided (and borders on self serving ‘FUD’)

          I’m excited about the developments here.

          Cheers!

          • Andrew

            All iPhone devices are not BLE compliant. Handset penetration data isn’t even a debate anymore. NFC devices will be over 500m next year. All terminals and ticketing supporting NFC. If you worked in this field you would understand that for large players in banking, retail,government, telco and OEM all ssupportand rolling out NFC deployments. No doubt iBeacons will play some role and small business is probably a great area but large retail, global stuff you can’t argue that NFC is well and truly dominate in terms of deployment, investment and infrastructure.

          • Pointebasic

            Andrew,

            You stated “All iPhone devices are not BLE compliant” Nor did I.

            I looked at the Gartner data you “cited” in your article and it is for ‘Worldwide Smartphone Sales to End Users by Vendor in 2Q13′. So nearly all the iPhones sold in the 3rd Qtr. are BLE compliant. Unless you believe the iPhone 4 makes up a significant portion of Apple’s 14% share of the Q3 global sales. Also included in the 86% marketshare of as you state “manufacturers which ship NFC devices” is a share of 40% to Others?. If you had presented a reference to numbers of devices actually shipped with NFC, instead of Gartner’s marketshare estimate of vendors who may offer NFC in SOME of their devices, that would have been more helpful to the discussion.

            “Handset penetration data isn’t even a debate anymore.” Because something isn’t a debate any more does not mean it is not debatable. No OEM reports hard numbers (even Apple doesn’t break down numbers by model and they are the only ones reporting any numbers on a regular basis).

            “NFC devices will be over 500m next year.” Okay, So I added up iPhone sales by quarter since the release of the iPhone 4S (which is the first BLE compliant iPhone) Q12012 through Q3 2013 = 241.44 million phones. Some of these are 3GS and iPhone 4. If conservatively Apple sales are totally flat YoY you add another 142 million iPhones (all of which are BLE) you end up with 393 million (yes not all of these phones were BLE nor are they all still being used). This doesn’t include any BLE compliant Android, or Windows phones. Depending on how many Non-Apple OEMs include BLE, it is not much of a stretch to see there could be the same amount of NFC and BLE compliant smartphones by the end of 2014. I’m not including the tablet sales and I don’t know what you mean by “NFC devices”. Given the data you have quoted in your postings I assume this means anything with NFC in it. Yes I understand as of today there are effectively “zero” POS systems with BLE/beacons.

            As far as what is every one who has deployed NFC enabled POS systems going to do? They will follow the money if they are smart. Maybe the money is people using NFC, maybe it is not. You act like no business has ever abandoned any less than optimal system? NFC has been around for what a decade? I rarely see people using their phone or even NFC enabled credit cards at a checkout (Anecdotal “evidence” = with a block of salt)

            You sound like a smart guy. I’m sure you could figure out how BLE and “beacons” could be used in a POS system. You seem to be the only one questioning how this could be possible.

            You are right I’m not in the industry, and since you seem to be, could you supply what percentage of transactions occur using NFC? It would be very interesting considering all the smartphones and POS systems with NFC.

            I understand you are invested in NFC, but it seems there is not a whole lot NFC can do that BLE can not. Maybe I’m not understanding the basic technology?

            Cheers

          • Andrew

            An important question you need to ask yourself is how many BLE payment, transport, retail and telco deployments are there? Now ask yourself how many NFC payment, transport, retail and telco deployments there are? If you’re struggling on the NFC side to see how many there are I’d be more than happy to share with you.

            Yes, NFC has been around for 10 years which highlights how much integration, development and collaboration is needed by a range of different stakeholders to get to where we are today – amazing isn’t it? No different to email being around since the 60s and internet in basic form since 60s as well, these things just don’t happen over night and when it comes to payments it’s no different.

            I have no doubt BLE will be a fantastic and useful technology, probably used more within the Apple developer community than other mobile OS but at the same time, these large industry scale deployments will continue to gain momentum with NFC like they are today. If BLE was seen as an NFC killer or substitute, the governments, banks, retailers, payment issuers, telco’s, etc would be deploying BLE based solutions, the reality is…..they’re not.

            Time is the only way this debate will be decided, from the commercial rollouts done to date with the above as well as the technical integration, collaboration and investment it’s clear that NFC is the leader and with NFC enabled devices growing at blinding speed every month this will only continue.

            Best of luck with BLE, I look forward to seeing some great uses of the technology, no doubt the developer community will create some fantastic apps for it.

            Cheers,
            Andrew

          • Andrew

            Hey guys, you should check out this deployment of NFC for public transport; Here’s the Dubai deployment http://bit.ly/1gX1gPu and here is the Hong Kong deployment http://bit.ly/1cnJ2Vb

            Understand that these are not pilots but full commercial rollouts and the organisations involved aren’t waiting for Apple to include NFC, they’re going full steam ahead.

            This will continue with an endless number of full scale deployments utilising NFC moving forward.

            We’re moving past “it’s coming” to “it’s already here” and the organisations involved (retail, government, banks and telco’s aren’t playing the waiting game with Apple)

            Cheers,
            Andrew.

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  • Will

    “Bluetooth and the now-defunct NFC” I didn’t get the memo.

    Who uses bluetooth on their phone anymore?!

    • Bob Hazard

      Low Power Bluetooth is a newer standard

      • Will

        That has yet to be proven

        • rattyuk

          Apple has had BLE in all their phones since the iPhone 4s. Apple is playing a chess game, waiting for all the piece to align before launching stuff like this.

          • Will

            What game? There is no game. Nobody cares about BLE. Consumer or business. Sure you can find some fancy BLE-enabled speakers or one-or-two shops that will buy iBeacon. But not mainstream. It’s so complicated to use… people just email pictures between them most of the time.

            Final though: It’s just one of many ways to communicate. What’s so special about this?

          • echamberlain

            Bluetooth is a readily available short range infrastructure.

          • Will

            Not in shops. And barely used. I guess we’ll have to see.

          • pk_de_cville

            I don’t have a link, but there’s a report out that google is walking away from NFC.

            Seems to indicate they’re moving towards beacon tech w BLE as there’s no other location/retail std around.

          • Will

            Can’t deny that. But NFC and BLE are not mutually exclusive. Who wins the mobile payments war… we will have to see.

    • localsocial

      Hi Will –

      Stats are roughly as follows and vary by country, and importantly, by age profile, so for example, in UK roughly 50% of all phones have Bluetooth on, but this changes to 70%+ in 14-18 year olds. In US it’s around 35-40% of all smartphones, but skews higher in certain demographics. In Asia, it runs higher than both US and Europe.

      So – it depends on where you are, what age you are, and more recently, whether you’re in to certain sports for example (as fitness devices like HRMs and pedometers increasingly use BLE as that’s one of its design use-cases).

      BLE is is 100% of Apple iOS devices since iPhone 4S (including the iPod Touch, iPads, and all phones), and is now is roughly 30% of new shipping Android phone models.

      It’s not typically in speakers – that’s “regular” Bluetooth. Audio streaming is not an element of BLE.

      • Will

        Thanks for the update. I would be more interested in usage patterns as having bluetooth on doesn’t mean it’s used. I cannot think of a useful scenario. Even the new AirDrop feature seems very limited as users have to be relatively close to each other.

        How did you get this data anyway?

        • localsocial

          Hi Will –

          Working backwards:

          We got the data from both the Bluetooth SIG, plus our own internal data. We provided some core Java/Bluetooth technology to handset manufacturers, which shipped on over 300M phones to date, so we’d get some aggregated data from that which we tracked.

          On AirDrop: it’s designed for sharing things (photos, files) with people nearby (like Bump does, acquired by Google). That’s a use case millions of people love and use everyday, so that’s why it’s restricted to being close. For sharing things with people further away, there are lots of other solutions (Facebook, Flickr, Email, twitter, etc).

          Useful scenarios (if you mean BLE usage scenarios) are literally everywhere.
          http://www.swirl.com/
          http://www.kickstarter.com/projects/126495570/bitlock-turning-your-smart-phone-into-your-bike-ke?ref=live,
          http://blog.bluetooth.com/paypal-uses-bluetooth-smart-in-new-beacon/,
          http://techcrunch.com/2013/07/30/kevo/

          Etc. etc.

          • Will

            Fair enough, quite interesting. But how do you know when BLE it’s turned on? Constant anonymous feedback from users? And do you have usage related data (like exactly how BLE is used every day, not just if it’s on/off)?

            Also, all those examples can be achieved by NFC already and they have not become mainstream. Even if most new Android phones have it. The question is why would BLE be different?

          • localsocial

            A few further comments to help clarify:

            When we shipped our stuff on over 300M phones, it was regular BT, not BLE, so our stats were based on “classic” Bluetooth, just to be clear. However, they were directionally useful regarding how consumers use BT generally, and whether they switch it on/off, and so on. We sampled user’s usage with opt-in from them to help get answers to those questions – what’s it used for, how often, and so on. Most uses (3 yrs ago) were for streaming audio (headsets, speakers), file transfer (14-18 yo’s in various countries), messaging (same).

            No one, AFAIK, has up to date data on BLE usage in day to day use. Note that you need to distinguish between classic BT usage (e.g. using a headset with your phone) from BLE usage (connecting my Polar HRM to my phone with runkeeper, using FitBit with my phone, using a wireless leash like HipKey, SticknFind, or Tile). The latter are all BLE use cases, whereas connecting your phone to your car, or using a headset, are “classic” Bluetooth use cases. Smartphones have dual mode chips that support BLE and Classic Bluetooth, while certain sensors (HRM, tags, beacons) are using single use BLE chips, with no support for stream audio and other Bluetooth profiles.

            And I would disagree, not all those use cases are “already covered” by NFC. You cannot stand in a supermarket aisle and hold the phone in your hand, and get alerts or information regarding products nearby based on beacons that are detectable. You have to walk over to something and tap it. While that might feel trivial – it’s actually a huge difference in user experience, and one of the reasons that people are referring to NFC as being “dead” (though I don’t agree). It’s just not as good as BLE for certain use cases, and that’s one.

          • Will

            “It’s just not as good as BLE for certain use cases, and that’s one.” The reverse can be said as well. NFC and BLE do not directly compete with each other in most cases.

            But in terms of commerce, I do not see any benefit for BLE. It is simply not true that it is better. It has yet to be deployed and proven to be true. The benefits are purely theoretical.

            I know this might come as a surprise, but people might hate alerts from advertisers based on your location. Can you imagine walking in a mall and getting flooded by adverts from all the shops within range? Or even multiple promotions within the same shop? Terrible idea.

            Thank for the info though, great insight on bluetooth, I just don’t see it working.

          • localsocial

            I think we’ll agree to disagree on the use case for in-store. Let’s check back in 12 months and see if a well executed opt-in deployment delights customers. I believe it will. I agree people hate spam (of course!).

    • Yannick Migotto

      When driving, as a use-case!

  • Nuri Dom Ripley

    Lucky to start the day with such a great article, thank you!

    One little thing though, ‘ beg the question’ means ‘to assume the truth of the very point raised in a question’ ; ‘ prompt/engender the question’ might’ve worked better in that context.
    Best,

    • http://stevecheney.com/ steve cheney

      I love that suggestion and the attention to detail. I think engender would be a good word choice there.

  • John Yoong Fook Kueh

    We help retailers integrate iBeacon functionality into their existing app and supply with with BLE hardware at http://www.beaconmaker.com

    • http://stevecheney.com/ steve cheney

      I’ll check you guys out – thanks.

  • http://hoodasaurabh.blogspot.com/ Saurabh Hooda

    @stevedcheney:disqus: This is – no doubt – a great article. But I want to thank you for the care that you’ve shown to me as a reader. This is the First time I’ve seen a jumpback to footnote. Nearly 100% of the bloggers just give the footnote but no one bothers to add “jumpback to footnote”. Wow!!
    And icing on the cake is that a reader can read entire footnote just by reading “title” of the footnote (by hovering over footnote). Wow man wow. Thanks.
    God lies in details and you’ve proved it :)

  • Dave Mathews

    This act of registering a beacon to an app will kill the ambient “discovery” magic that BTLE will allow. We’ve been developing this on Android with our ToothTag launch in 2011, with iOS since iOS 6, and wrote a framework that gives radio triggers across ALL operating systems… More on that here: http://blog.newaer.com/2013/10/ibeacons-are-bluetooth-le-or-bt-smart.html

  • http://blog.nextblitz.com gzino

    Great post. A couple other potential uses:

    1. Niche case but one may of us are interested in…auto disable of cell phone while driving:

    http://nextblitz.com/blog/ibeacons/

    2. P2P mesh networks, including ad-hoc. Use iBeacons + multipath TCP (also in iOS 7). iBeacons for power efficient peer/network advertising/discovery/selection. MPTCP to help maintain sticky TCP and TLS sessions during network changes, as well as to aggregate bandwidth across multiple interfaces.

  • http://www.semilshah.com/ Semil Shah

    Random question adjacent to #7, what are your thoughts on Euclid?

    • http://stevecheney.com/ steve cheney

      Have heard good things and wanted to meet the team awhile back. I think analytics for the real world is a big trend and there are some interesting approaches (cameras, WiFi, etc).

      • http://www.hunterwalk.com/ hunterwalk

        did you get an intro to Euclid? Can help here if needed…

        • http://stevecheney.com/ steve cheney

          Thanks so much for offering. Yes, will send you an email.

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  • Tony Marks

    We’ve seen an uptick in Passbook inquiries from brands, almost immediately after announcing an end-to-end solution for Passbook and iBeacons at Wave-A-Lot.com. However, I am curious, do you think we’ll see much innovation in terms of hardware, or will the (yet to be released) Apple specs/protocol set the standard, and we’ll see iBeacons become more of a commodity based product?

  • http://www.michaelgcohen.com Michael G Cohen

    Steve, great article and good insight. We’re starting to take a look at beacons as a way to increase the value of a strong loyalty program by combining the proximity messaging of beacons with loyalty and purchase history to create powerful 1:1 offers. We’ve been looking at Estimote but would appreciate your thoughts on some other leaders in the emerging space.

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  • Ken Gai

    I landed here based entirely on the “Transform Commerce” hook in your post title. Of course iBeckon might well be ‘disruptive’ if folks could just bump to make a payment over BLE.

    However.. questions revolve around privacy / security – encryption comparable to NFC? – of such transactions, and, revenue share required by platform providers.

    At any rate; “Why would retailers not consider deploying beacons when every single person [with an iPhone] can be marketed to?** ”
    ** “opt-in only, and [dependent on the consumer] downloading and authorizing an app”

    These [niggly] little ‘subject-to’ points might indicate “Why(not)”… @_@

    • vidster

      “opt-in only” AND smart merchant app that has a temporal dimension… I could be lingering in women’s-iingere for good reason — should say intentionally :-) Or more likely, passing thru looking for men’s clothes or other.

      In a department store I shop with intent and don’t want info/deals on unrelated items. In a hardware or sports store, I’m more likely to browse and thus be receptive to more general product promotions. See such custom messaging as critical to BLE being a help or hinderance.

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  • abakker

    great article. We have been putting NFC enabled beacons on gaspumps and integrated them with POS devices for electronic discounts. Love beacons

  • DrinkedIn

    Steve – fantastic explanation and I agree with you 100% on the local strategy. We have some great ideas on how to leverage this in upcoming app features. The use cases are amazing. Thanks for this article!

  • John Cram

    I can’t wait to have my phone buzzing with message (way better than a store person bugging me!) – gosh it’s like getting all email spam without having to check my mail. dumb. there are a couple of application for this but in the end just more tech that is overkill.

  • localsocial

    Great post Steve. Full disclosure – we’re another company in the emerging “Beacosystem” (you’re welcome!) – offering in-store engagement using beacons, where to us, a beacon can be an iBeacon, a BLE beacon, or even a WiFI beacon or (wait for it) an NFC tag.

    We’ve seen a significant level of interest around BLE for in-store usage in the last year, because they have attributes that “just work” in the retail setting:

    - cheap enough to deploy widely in the store
    - run for 2 yrs on battery
    - flexible ranging – from 3 feet to 30 feet+
    - compatible with 100% of Apple mobile devices, 100% of Microsoft mobile devices (check it out) and 30% and growing of Android mobile devices
    - lots of good usage scenarios for both smartphones and tablets (where tablets becoming huge in retail, as they displace older POS and also become the new instore tool of choice for staff)

    For some reason, many people assume NFC is “dead”. Indeed – many of the articles on iBeacon have been issuing an iBeating ™ to NFC.

    I think that it’s not actually dead, just that the use cases are going to get boxed in to very specific areas (e.g. tap to pay by Credit Card). But for many proximity-related scenarios, including many that were originally envisaged for NFC, BLE looks like being a better solution, and more importantly, one that the industry in general will support across the board.

    • vidster

      “NFC tag” as beacon …interesting!!! Care to elaborate? The RFID (NFC) tag is standard-issue passive, or powered?

      RFIDs will never die IMHO — if there’s shopping, there’s theft and RFIDs (at 15¢ ea.) are a cheap security measure. This most critical RFID application doesn’t require NFC-enabled consumer devices.

      “[NFC] use cases are going to get boxed in to very specific areas” … I suspect you are correct but if BLE does proliferate, the most popular app EVER will be one that turns them off (or provides user-controlled, high-granular filtering). The fear of smartphone as _spam magnet_ is well-founded.

      • http://blog.seanosullivan.com/ Sean O Sullivan

        What I meant when I said “NFC Tag” as beacon is this: our platform treats several types of things as a “beacon”: NFC Tags that can be “seen” by Android/W8 Handsets, WiFi APs (ditto), Bluetooth (ditto), and BLE Beacons and iBeacons (can be “seen” by all iOS devices, and 15%+ growing Android handsets). Hope that helps clarify.

        Yep – I agree that initially, there will be a tendency for people (developers) to “go mad” with the initial use cases for BLE. We are constantly advising retailers that just because BLE enables you to do something (such as make the phone buzz when someone is near) doesn’t mean you should do it. It’s similar to how you see companies like Urban Airship try to educate their user base on “best practise” for notifications. No one wants to create a an app that becomes a pester-app and therefore gets deleted.

        So yes, while there will be bad behaviour with BLE (as there was with SMS, email, notifications and plain old snail mail), we’ll eventually see it settle in to proper utility.

  • tbkama

    Crual that Foursquare (and the first wave of locations startups) missed this opportunity. Afterall, this the very place where having a micro-location “layer” and checkins are going to be really relevant…assuming they could build real drivers around frequency and specials…all they needed was to run on top of iBeacons or PayPal Beacons …

    Might be a matter wrong timing as well….but i find it really amazing that checkins and Payments are merging together finally!

  • Less_Government

    Most commenters focus on the use of iBeacons in stores to deliver coupons and location information. I think that the technology can also provide huge productivity gains in the service sector. Think restaurants. Except for the delivery of the meal every other trip to your table by a server could be handled by iBeacon-based apps: presentation of the menu, taking the order, presenting the bill, returning to get the credit card, presenting the credit card receipt can all be handled by the app. For the customer this means less waiting, more personalization and a payment receipt that is stored on your device without the need for paper. For the restaurant owner this could offer substantial cost savings. Food for thought.

  • Jeremy Hor

    This is really a no-brainer. I can imagine how iBeacon will bring us far beyond our expectation.

  • eftcomms

    Awesome post, Steve. I’m dealing with this paradigm as we speak. Trying to get a payments app to work at the pump for a gas station retailer. NFC is too limited, so we’re moving on to BLE.

  • tperfitt

    Great article. We have been using beacons as well in the past could of weeks, and it is going open a whole new world of gaming in the physical world as well. Also, adding in proximity to services like IFTTT and Zapier adds a new dimension to those services when you can kick off the recipes with your proximity.

    Thanks for writing the article. Great stuff.

  • Sam Duke

    I didn’t really get your point about fragmentation preventing roll out of this tech to android. Taking account of market share it seems that this is immediately compatible with just as many android devices. Don’t forget about the android support libraries – no update required.

  • http://www.sabenz.com/ sascha benz

    Wrong comment

  • http://www.iforce2d.net iforce2d

    “defunct NFC”?? Somebody should tell the tens of millions of people here in Japan who use it many times a day to ride the subway, buses, and pay for goods at stores. China is starting to catch up now too, with 2013 showing a five-fold increase of over $130 billion in transactions. I guess they didn’t get the memo that NFC doesn’t work. And then Korea… the writer of this article could perhaps watch this video to get a clue: https://www.youtube.com/watch?v=X09Wa-hyUxM (note it was uploaded over three years ago too)

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