Daily Dose of iQ: Will Apple’s iBeacon Be a Retail Game Changer?

Two days ago, when Apple announced its new iPhone models, the company made very little fanfare about a new feature within iOS 7: iBeacon.

Hari Gottipati of Gigaom, though, figures iBeacon could be big -- so big, in fact, that it marks Apple’s commitment to Bluetooth technology (Bluetooth Low Energy, or BLE) over NFC technology in the physical retail space.

He describes the following iBeacon scenario, set in a Macy’s store (pictured above):

For example, imagine you walk into a mall with an iPhone 5s (comes with iOS 7 and iBeacon). You are approaching a Macy’s store, which means your iPhone is entering into Macy’s iBeacon region. Essentially iBeacon can transmit customized coupons or even walking directions to the aisle where a particular item is located. It can prompt a customer with special promotions or personalized messages and recommendations based on their current location or past history with the company. Smartphones that are in an iBeacon zone will benefit from personalized microlocation-based notification and actions.”

iBeacon looks good so far, but details on the new technology remain vague.

This iBeacon technology sounds extremely promising, particularly from the retailer’s perspective (location-based services, mobile coupons, CRM, loyalty programs, etc.). BLE appears to present a number of advantages over NFC. But Apple’s documentation on iBeacon is sparse at best.

From what I can tell, the only problem with iBeacon is that only Apple will embed this technology into phones. If Google doesn’t embrace the same standard, retailers will only be able to address half the market at best, which will likely kill the mood.

The big question is if Google and other OS makers will get on board with BLE or stick to NFC.

It also doesn’t solve the problem of actually getting people to install a store app on their phones. Without a specific app for a specific retailer on a customer’s iPhone, iBeacon does nothing.

Meanwhile, news also came out that PayPal has a beacon of its own.

Take home message: While iBeacon might not be a proprietary system, as I mentioned: It’s yet to be seen if Google will accept the way Apple has implemented this, and piggy back on the technology, or if they will try and do it alone and fragment the market even more. Fragmentation kills technology like this.