5×5: Will Apple’s iBeacon Win the Beacon Wars?

by | Friday, February 7th, 2014
5×5: Will Apple’s iBeacon Win the Beacon Wars?

It’s Friday – time for RE:INVENTION’s 5×5. Every Friday RE:INVENTION’s leadership team explores a news topic or research report in depth, sharing our unique perspectives.

UP THIS WEEK: Beacon Technology, Apple’s iBeacon, and Innovation

What is a beacon? A beacon is a small, low cost sensor that uses BlueTooth to track your location inside buildings and push information to your phone. It’s more precise than GPS or WiFI and consumes less power. The technology has the potential to bridge physical locations and digital experiences, transforming how retailers, event organizers, transit systems, enterprises, and educational institutions communicate with people indoors.

To date, iBeacon (Apple’s brand for low energy BlueTooth) appears to be leading the pack in advancing this new technology. But the beacon wars have just begun. Paypal, Qualcomm, and a variety of smaller vendors are entering the market with their own beacon hardware.

This Week’s Reference Articles

THIS WEEK’S QUESTION

Will Apple’s iBeacon emerge as the leader in beacon technology? Or will another company win the beacon wars?

OUR TEAM’S RESPONSES

Kirsten Osolind (“President and COO”)

Beacon technology will improve the way consumers use smart phones and transform numerous industries by solving the indoor geo-location challenge. It has great potential to facilitate better mobile payments thereby disrupting the whole credit card ecosystem because of its range. But there will be hurdles with regard to beacon technology commercialization. Beacon technology already has privacy advocates and legal experts buzzing about the implications. The key to beacon technology success will be winning over consumers and heightening their user experience.

At first blush, the company that seems best positioned to achieve competitive advantage is Apple. Apple is exceptionally good at function and interactive design. Apple excels at branding and educating consumers about new product categories. According to TechCrunch, Apple appears to have a secret leg up on the competition since “every compatible iPad currently deployed in a retail store is already capable of being configured as an iBeacon transmitter — and the iPad is already dominant in the retail space.”

But here’s the rub. Android can discover beacons that aren’t your own, while Apple restricts this ability. Open ecosystems typically win when it comes to consumers embracing new technologies.

And since Apple doesn’t have patents on the technology involved with iBeacon, competitors will increasingly come forward with low cost beacons of their own.

Regardless of who wins the wars, Apple will relentlessly improve and expand the system going forward. And that’s a good thing. When it comes to beacon technology, this is just the first wave of innovation. There’s much more to come.

Joe Barrus (“The Technologist”)

iBeacon is Apple’s brand for low energy BlueTooth.  What makes BlueTooth LE special is that it requires very little power to run and won’t be a drain on your device’s battery.  This will finally allow independent communication between devices and other objects that have not previously been thought of as being communication enabled.

Technologists have long been predicting the arrival of The Internet of Things which is a future state rapidly coming where everyday household items (or things) are hooked up to the Internet allowing for remote control or two way communication.  Examples might be your oven signaling you when the food is cooked or your refrigerator doing your monthly shopping without you.  BlueTooth LE will take this concept one step further by enabling local point-to-point communication between devices and “things.” but only within a short range proximity to each other.

The use cases are boundless and, in my opinion, fairly exciting to think about.   Many are thinking about consumer oriented uses, however, use cases can span across many different environments from driving revenue for a company to providing social good.  What it will really drive is extreme personalizition of experience and increased inefficiencies.  Imagine going into Starbucks and having the coffee maker automatically start brewing your favorite drink without having to get into line.  The coffee-maker communicates with your phone to start the order and the cash register automatically debits your account.  This can leave the baristas free to focus on making coffee and customer service.  BlueTooth LE can also further enable augmented reality use cases for your smartphone or tablet.  Imagine walking through your favorite tourist city and as you come across various landmarks, etc. with embedded BlueTooth LE devices, your device could overlay imagery or text to provide additional information on that landmark, etc.

Apple is very good at branding and driving adoption of new technologies by connecting well with the consumer.  However, the technology is not exclusive to Apple.  So, while Apple may perhaps be first to market with some innovative usage of this technology, other vendors will quickly fall in behind to fully take advantage.  I am looking forward to it.

Dennis Jarvis (“The Marketeer”)

While perhaps not befitting the label of disruptive, Beacon Technology represents yet another evolution in our daily digital lives. iBeacon leads the way and my money is on Apple capturing the lion’s share while competitors seek their own point-of-difference.

Let’s consider the dynamics of this evolution, those that are good, maybe great, as well as the possible pitfall? On the one hand, Beacon brings with it the potential for significantly adding value to our experiences, be they entertainment events, retail, transit, education, etc. And, consumers will be drawn to the siren, with all of its conveniences and efficiencies. The availability of a seamless stream of real-time information at any leisure venue – ballgames, museums, concerts, etc. – will enable unencumbered access to tickets, seating locations, insights about the event, and concession bargains. Add to that the ease of navigation afforded to us at retail, along with specials and deals seemingly more within reach, and the ability for more efficient exchange of currency, means Beacon technology is a sure bet. Yet, I wonder just how many more push notifications we can or want to handle. Still, the real pitfall comes with the realization that the ultimate success of Beacon technology, as with most things digital, resides with our dependence on just how responsible organizations are in managing it, versus exploitation to the point where we say “enough.” Already, we are somewhat skeptical as evidenced by the following: 93% of consumers are concerned with their privacy from digital technologies; 73% don’t want their clicks tracked; 41% distrust businesses who collect data about them online; 40% are uncomfortable about personalized ads pushed to them; 36% have unfriended a brand over privacy concerns (Brandology. May, 2013). So, yes the public most certainly will gravitate to “the” Beacon, but it will be monitoring and voting on organizations and companies who violate their trust.

Jorge Barba (“The Culture Guy”)

There’s potential. Beacon technologies will keep driving the big trend of “automation”, where there is less human interaction. This might not work for every person and situation though, as some people will prefer to talk to a human at some point.

The main topic of conversation will be how this changes the retail experience, but the bigger picture here is that we may end up getting fatigued by all the varied applications that can use these technologies.

The iPhone might end up pushing this forward, but there are a varied amount of apps that could potentially play here: Square, Google+, Foursquare, Twitter and Facebook, among others. These are all situation aware apps that one way or another have the signals necessary to know where you are.

We are already inundated with notifications from Facebook, Twitter, Foursquare and other apps, in the big picture, how will this sit with people? What happens next?

This is the short-term issue I’d think about. This is a wave that is just getting started, and people will be forced to adopt this technology because of their phones. Many questions still remain unanswered.

Kane (“K-9 Intern”)

I don’t need much guidance to find good products. I rely on my nose. Dogs like me instinctively know how to sniff out opportunities. Hmmm….wonder if I can patent my nose as a tracking device?

THE FINAL WORD
Apple’s iBeacon is a strong contender in an exciting emerging category. Beacons can be utilized for a bevy of new purposes from geolocation to shopping analytics to targeted messaging. Many of the new entrants will provide solutions that complement each other. At RE:INVENTION, we’re excited to see where the industry is headed next.

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