Apple Could Make a Killing on This Little-Known Device

Apple has been searching for the next iPhone-like driver of growth. Is this device the answer?

Jul 15, 2014 at 9:45AM

The iPhone is getting stale, or at least, not expected to drive growth as smartphone penetration reaches its peak. Unless consumers start carrying around two iPhones, investors are still waiting for Apple (NASDAQ:AAPL) to come up with the next profit-driving monster.

Many think this might be a role for the rumored iWatch. However, at an estimated selling price at half of an iPhone, around $300, and a consumer interest yet to be confirmed, especially based on sales of early Samsung smartwatches, the iWatch might not live up to expectations.

But, one device that links up with iThings anywhere just might give Apple an iPhone-sized financial boost: an iBeacon transmitter for every home and business.


iBeacon possibilities. Source:

Imagine walking past the grocery store and receiving a notification of a sale on your favorite brand of cereal. Or, after sitting at a bar for an hour, receiving a coupon for your next round of drinks. Or, leaving a clothing store and automatically being charged for the items that you ordered to fit. iBeacon can do these things with low-energy Bluetooth technology, or BLE.

As opposed to NFC, which requires a distance of about four inches between devices in order to communicate, iBeacon and BLE can be broadcast up to 150 feet. This makes the possible applications much broader. For example, the NBA has used iBeacon to offer upgraded seats closer to the court to fans in cheaper seats.

Apple-made or licensed
Apple introduced iBeacon in 2013, and recently came out with standards needed to earn consent for use of the trademark. There are many variations of iBeacons that third-party manufacturers have designed, like Estimote's rock-shaped transmitter, or the more utilitarian AIRcable USB dongle.


Estimote's iBeacon device. Source:


AIRcable iBeacon USB dongle. Source:

However, a more Apple-esque design might come from the company. According to FCC filings, Apple has tested an iBeacon transmitter that it would manufacture itself.


Diagram from Apple FCC filing. Source: FCC.

How much could Apple make from its own iBeacons?

Apple iBeacon potential
Estimote sells three of their beacons for $99. This means that while the selling price of any Apple-made iBeacon would be low, especially compared to an iPhone, there's a chance for massive volume. Unlike a phone, which a consumer typically buys only one of, or a smartwatch, which the average consumer might have a hard time justifying buying any, the Apple iBeacon could sell many units per customer. And while it seems like businesses would be the first to utilize iBeacons, consumers just might be as keen on the technology as Apple comes out with its home automation software, HomeKit.

If Apple wins the standard in geographic-oriented mobile alerts, the potential benefits would be incalculable. It would strengthen the already strong ecosystem of iOS devices, place multiple Apple devices in one business or home, and strengthen Apple's positioning around payments, where it could take a cut from iBeacon-related purchases.

Apple will need to fight its competitors to win this space, of course. While Google's push with NFC payments seems to have stalled, making up 2% of global payments in 2013 with expections of only 5% in 2017, it has since pivoted to champion similar Bluetooth technology it calls Nearby.

A smartwatch may nudge revenue forward for Apple, but iBeacon holds a revolutionary industry in its radio waves.

One company that will perform well no matter how an iWatch sells
This small company will make Apple's newest gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Dan Newman owns shares of Apple. The Motley Fool recommends Apple and Google (C shares). The Motley Fool owns shares of Apple and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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