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Why Apple's 'indoor GPS' plan is brilliant

September 14, 2013 07:00 AM ET

A Polish company called Estimote, which has an office in Silicon Valley, has already announced pricing for iBeacons-supporting devices: Three of them will cost $99. (Note that three iBeacons is plenty for even a large store.)

Estimote app
The initial price for Estimote iBeacon devices is three for $99. And three is plenty to cover even a large store.

A company called Roximity will lease you their iBeacon-supporting gadgets for $10 per month each.

Now we know why WifiSLAM

Apple announced in early August the acquisition of a startup called WifiSLAM, a company that specialized in "indoor GPS." Specifically, WifiSLAM's technology triangulates both Wi-Fi and Bluetooth (BLE) to enable precise location tracking indoors.

In the context of iBeacon, Apple should be able to know how far a user is from both iBeacons and Wi-Fi hotspots, pinpointing the user's location to within inches.

Just a touch upon Touch ID

The final piece of the puzzle for the point-of-sale and transaction part is user authentication, which Apple revealed with the introduction of Touch ID fingerprint sensors on the iPhone 5S line. (I suspect all phones announced in the future will also have Touch ID sensors.)

The less insightful commentary on Touch ID suggested that its purpose is to protect the cat videos and electronic receipts on your iPhone -- in other words, protect the iPhone itself. But the real purpose of Touch ID is to authenticate users. "Yes, it's really Mike Elgan -- go ahead and process that payment using his credit card on file with iTunes."

One killer fact about iBeacons

People have been waiting for years for eWallets and virtual cash registers, as well as location-based marketing and automated check-ins to take off.

For the most part, we've been waiting for NFC, a short-range, low-power wireless technology that requires a special chip in both devices connecting to each other. Some Android phones, for example, have shipped with NFC chips. And every iPhone announcement of the last few years has been accompanied by speculation that, finally, Apple would build NFC into phones.

The expectations have been that the road to ewallets, virtual cash registers, location-based marketing and automated check-ins would be a long and arduous one, with full adoption someplace in the misty future.

But here's the killer fact about iBeacons: Every iPhone 4S, iPhone 5, iPhone 5c and iPhone 5s already supports iBeacons and everything iBeacons can offer -- that's probably about 200 million actively used phones (give or take 50 million), with Apple's selling dozens of millions more per quarter.

The equipment required for retailers to embrace iBeacons is a rounding error -- next to nothing on the hardware side.

And Apple is pushing app developers to build features and functionality into the system.

There will be no long buildup and chicken-and-egg hold-up around Apple's plan to kill cash registers, as well as implement location-based advertising and promotions.

Most iPhones in use already support it.

I think that very soon iBeacon solutions will be showing up all over the place.

Apple's plan is so good -- so elegant and cost effective -- that it won't just kill cash registers. It will probably kill NFC, too.

This article, "Why Apple's 'Indoor GPS' Plan Is Brilliant," was originally published on Computerworld.com.

writes about technology and tech culture. You can contact Mike and learn more about him on Google+. You can also see more articles by Mike Elgan on Computerworld.com.

Read more about Mobile Payments in Computerworld's Mobile Payments Topic Center.



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