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500 Million Reasons the iBeacon Will Change the Way You Shop

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Apple (NASDAQ: AAPL  ) launched its iBeacon platform in earnest this weekend when it deployed the tiny Bluetooth transmitters in each of its US retail locations. Some have dismissed the technology stating it has limited appeal, but those that pooh-pooh these diminutive data deliverers fail to see the big picture of what is possible with hyper-location awareness.

There's clearly a market for such devices. eBay (NASDAQ: EBAY  ) rolled out its PayPal Beacon a few months back, and Qualcomm (NASDAQ: QCOM  ) just announced a similar platform it's calling Gimbal. Apple has a big advantage over both firms and anyone else looking to enter the market: Any iDevice made in the last two years or so can be used as an iBeacon.

Apple's position in retail
Apple (with a bit of help from Square) plays a big role in many retail operations. Customers can use iPads to checkout; stores can use them as dynamic displays; restaurant patrons can use them to call waiters or order food.

Indeed, iDevices are already prevalent in J.C. Penney stores, Ford dealerships, Burberry shops, LaGuardia airport, and a bevy of other retailers big and small. Most of these devices can double as iBeacons, which means retailers can test out the technology with minimal cost and effort -- i.e. the infrastructure already exists.

Open platform
There's a lot more to the iBeacon than sending push notifications with special offers. That's how Apple is demonstrating it in their Apple Stores, but Apple is leaving the platform open to developers to create what it hasn't imagined.

One developer has already used the technology, in partnership with publishers, to allow cafe and pub patrons access to periodicals while sipping on their drink of choice. Once the customer leaves the range of the iBeacon, he no longer has access to the magazine.

eBay uses the exact same Bluetooth Low Energy for its PayPal Beacon, which facilitates in-store payments using its digital payment platform. The only thing required at checkout is a verbal confirmation.

eBay ought to adopt support for the iBeacon platform; it should require minimal effort considering the similarities between it and the PayPal Beacon. In that way, the company can capitalize on the existing iDevices in stores. It may, however, soon face competition from Apple itself in the mobile payments market.

Aside from those specific examples, there are dozens of potential applications for hyper-location awareness and small data dissemination.

Qualcomm's entry could help adoption
Qualcomm's Gimbal proximity beacons are priced as low as $5 for customers that buy in volume. Comparatively, Estimote, a company that launched recently to sell beacons, is taking pre-orders at the price of $99 for three beacons. The cost advantages are obvious at Qualcomm, which makes the Bluetooth SoCs itself.

Although Qualcomm seems intent on keeping retailers in its own ecosystem Gimbal Manager software, it doesn't seem farfetched that Gimbal will play nicely with iBeacons or other BLE devices. Considering the advantage of already having iDevices in retail locations, it's in Qualcomm's interest to play up the potential of linking those devices with its new product in order to increase sales.

I believe if Qualcomm doesn't provide support for Gimbal to work with Apple's platform, a third-party developer will because Qualcomm's devices are significantly less expensive than anything else currently on the market. Besides, it wouldn't be the first time Qualcomm benefited from an Apple product.

Untapped potential
I believe there's a lot of untapped potential in this technology, especially outside of retail and restaurants. The MLB intends to use the technology in its stadiums to guide fans to their seats. Museums may use it for self-guided tours. Homeowners can use it for home-automation.

The potential is really left to developers to think up. With approximately 500 million active iDevices around the world, there's a lot of potential iBeacons they can use.

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