In amongst the excitement regarding a major iOS update, a little-known but important feature called iBeacon has largely flown under the radar. What is iBeacon? And how will iBeacon work? These are important questions when you start to look at them.

What is iBeacon?

iBeacon is a Bluetooth Low Energy (BLE) system and framework that Apple has included in all of its iOS devices running iOS 7. It essentially uses Bluetooth to allow the phone to interact with regional-based devices, called Beacons.

Businesses can set up Beacons to deliver information to iOS devices in the local vicinity. The key term here being used is "Micro Location", and relates to making small scale location information available to Apple devices. Apple's iPhones and iPads have been using Location Based services for a while now, and while they’re very useful for Maps and apps like Foursquare, they tend to lack absolute pinpoint accuracy and aren't anywhere near as accurate indoors as people would like. iBeacon is set to change that.

Kit Eaton, of Fastlabs says: "The principle behind these services is simple: If your device can tell where you are with reliable accuracy - say within a hundred yards at least - it can use this information in some way to either deliver you relevant information about your locale, or it can tag some piece of information you're sharing online with the location so it can be used by other users or services."

(Read definitions of more Apple-related tech terms in our Apple users' tech jargon dictionary.)

Estimote Beacon

How do you use iBeacon?

At the moment iBeacon is just part of the iOS 7 SDK (software development kit) so it’s very much a future concept. iBeacon requires other people - notably shopkeepers - to invest in Beacon hubs such as the one made by Estimote. This technology enables users to integrate real world location technology with their apps. So if a shop invests in Estimote Beacons and also has an iOS app with iBeacon support the two can work together. Estimote is looking to create smartphone beacons and sell them for $99 to shopkeepers. It has more information on the Beacons in this promotional video.  

What can you do with iBeacons

Here are some of the things we expect iBeacon to be capable of:

  • Proximity marketing. Large scale retail outlets can invest in Beacon devices with their app store offering. SuperDry, for example, could place Beacon Devices around its store and shoppers could use the SuperDry app to gain information as they shop.

  • Micro Location-based notification. A store can transmit information direct to an iPhone device as the user walks around. Whether this requires a compatible app to be installed, or can work with Notification Centre remains to be seen. But essentially a Beacon can transmit customised coupons to a customer as they walk around a store.

  • Customised marketing. Essentially iBeacon can transmit customized coupons (designed specifically for you) when you enter a certain region. Perhaps if you’ve been to look at an item a number of times it could offer a discount to convince you.

  • Specific directions. Because Beacons provide micro location support they can be used to direct customers to specific items. This could actually be tremendously useful in large department stores, where iBeacon technology could provide the ability to search for an item using a store app, and find directions to that item in the store.

  • Indoor mapping. Because Beacons can provide micro location information indoors they can be used to dramatically improve indoor mapping. For US department stores and malls this is a much larger issue than we imagine here in the UK, accurate indoor mapping is very much on the agenda.

  • Contactless payment. This is the big one. Beacons and iBeacon enable contactless payment systems to be developed. Although it’s worth noting that there isn’t this system set-up already, and as far as we know there isn’t one planned. Even so, iBeacons ability to track a specific phone, linked to an Apple ID and user account opens the door for an Apple-based payment system. This in itself opens up a whole raft of questions: would Apple want its traditional 30 per cent (way too high compared to Visa or Mastercard); how secure would it be; what kind of service would Apple offer. And would shopkeepers be interested? These are the kind of questions that are wholly speculative in nature. What’s important is that we can see here Apple laying the groundwork.

See: Apple’s iWallet suggests NFC is coming to an iPhone near you

iBeacon being used in store

How does iBeacon differ to NFC

A lot of this may sound similar to NFC (Near Field Communications). This is a technology that Google has been championing, and it offers similar sorts of service to iBeacon.

But it’s generally thought that iBeacon is a better system. iBeacon provides information as you need it, like NFC and can enable payments if shopkeepers want it and Apple develops the service. But Beacons have a wider range and are cheaper, much cheaper, than NFC technology to implements. And the devices can run for up to two years on a single coin battery. This range and affordability means that Beacon is a more practical solution to NFC.

Why did Apple go with iBeacon and not NFC

There are a few reasons why it makes sense for Apple to go with iBeacon and not NFC. The first is that range and affordability.

In a detailed piece Hari Gottipati, writing for GigaOm, has outline just how important this is: “The average area occupied by a Macy’s store is 175,000 square feet, which is 16,258 square meters. iBeacon’s range is 50 meters (typical Bluetooth range), or 2,500 square meters. So a typical Macy’s store would need 7 iBeacons. If Macy’s wanted to add NFC tags (each at 10 cents) to all its products to send information to phones, it would cost $1,000 for 10,000 products, $10,000 for 100,000 products and $100,000 for 1 million products. NFC may not be needed on all products, but this will give a rough idea on how much it could cost.”

AirDrop does the file transfer

There’s also the fact that Apple doesn’t really need, or perhaps, want NFC. It has AirPlay and Airdrop to handle the transfer of files, music and video clips. And NFC comes pre-loading with assumptions that Apple may not be able to fulfill, such as mobile payments. iBeacon is a new technology that offers a blank slate for Apple to make of it what it will in association with shopkeepers.

And NFC is used by Google. And Google vs Apple is still very much a thing to consider. This is also  the downside of iBeacons compared to NFC. Because it only works with Apple devices, shopkeepers have to pay to target iPhones and not Android phones. We’re pretty sure shopkeepers want a marketing system with universal support; a payment system without universal support is simply out of the question.

Could iBeacon make the Internet Of Things a reality

This is the rub of the matter. All of these technologies: Beacons, NFC and micro location devices are designed to bring about a state of affairs called “The Internet Of Things”. This is all about pinpointing real world objects with unique identifications, and then allowing people to search for real physical things in the same way that they search online for virtual things. iBeacons takes that down to the store level, NFC tries to go all the way down to each product in the store. NFC hasn’t really made much of an impact in the real-world, but it might be that iBeacons is the more practical solution that the world is waiting for. Time will tell.