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Wednesday, September 18, 2013

Google, Apple and PayPal vie for Leadership in the IoT approach to Shopper Location and Automated Payment

The iBeacon's capability to send coupons and other offers is
demonstrated by Estimote.
As reported by Mobile World Live: Apple’s launch this week of iOS7 will include a new feature called iBeacon, a location-based service that enables retailers to target shoppers when they enter a store, according to GigaOm.

The new service, which is based on Bluetooth Low Energy (BLE) technology, follows the similar-sounding Beacon service announced by PayPal last week, which also targets the retail market and also uses BLE technology.

With Apple’s iBeacon, retailers can deploy small wireless sensors that send data, such as personalized offers or coupons, to a user’s iPhone over Bluetooth.
An example of  'proximity marketing' using the iBeacon.

PayPal envisages users making payments via its service. Apple’s intention for iBeacon is less clear - though it appears to more focused initially on 'proximity marketing' rather than payment. The company announced the initiative at WWDC in June but gave no specific details about it (and said nothing about it during last week’s launch for the iPhone 5S and iPhone 5C). The service is a potential competitor for Google's NFC, said GigaOm.

A vendor called Estimote has launched a demonstration video for its forthcoming Beacon product (pictured above) which it says is compatible with iBeacon. Its products are designed to be placed around stores and send data to shoppers.

What is BLE?

As the name implies, Bluetooth Low Energy (BLE) is built specifically to consume small amounts of energy and make phone batteries last longer. But there are limitations with BLE when it comes to transferring data. BLE only supports very low data rates and you cannot stream audio using BLE. You can send small files using BLE and it is a good candidate for small data packets sent from wearable computing such as smart watches and fitness trackers. Built-in platform support for BLE was only added in Android 4.3 (some Android OEMs like Samsung and HTC did develop their own SDKs for BLE prior to Google releasing native support), which is why fitness tracker apps won’t work on some old Android phones.

Why it might be a NFC killer?
iBeacon could be a NFC killer because of its range. NFC tags are pretty cheap compared to NFC chips, but NFC tags are required on each product because NFC works only in very close proximity. In theory, NFC range is up to 20cm (7.87 inches), but the actual optimal range is less than 4cm (1.57 inches). Also, mobile devices need to contain a NFC chip that can handle any NFC communications. On the other hand, iBeacons are a little expensive compared to NFC chips, but iBeacons range is up to 50 meters. Not all phones have NFC chips, but almost all have Bluetooth capability.

Why it is so affordable?
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.

Estimote, is taking pre-orders at the price of $99 for 3 beacons. The range of Estimote’s beacons is 50 meters, but the recommended range is 10 meters. If you go with the recommendation, you need 1 Estimote beacon for every 100 square meters, which would cost you about $5,000. 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.

Google’s focus is on NFC; it just added BLE support to Android
Google has been heavily focused on NFC from the beginning and it didn't add platform support for BLE until the release of version 4.3. Lot of the apps that rely on BLE couldn't release the apps for Android phones. Some Android OEM vendors recognized the need and rolled out their own implementations. Google finally listened to the demand and made it part of Android 4.3. But Google has continued to push on NFC and rolled out the NFC-based Android Beam in Android 4.0.