Where will iBeacon go next? What’s the future of proximity technology?
We’ve moved far more rapidly than I think even Apple could have expected – shifting from pilots to large scale deployments across multiple industries in a compressed time period.
Stefan Wolpers, who’s a stand-out thinker on the technology (and published a compelling overview of the role of beacons in omnichannel retail) offers these predictions for the future.
Guest Post by Stefan Wolpers
The next 12 months won’t just see more and more retailers embrace beacon technology. We’ll also see advances in hardware and back-end systems. Here are some predictions of what comes next.
Beacons will become a hardware commodity within the next 6 to 12 months:
Competition: Barriers to entry for beacon production are low and the market will be driven by economies of scale. The current delivery problems–if they exist at all–are nothing but a temporary latency effect while beacon production is ramped up. This will result in the usual decline of prices and margins as well as a broadening of the offering. As a startup, you don’t want to be caught up in that process.
There is no enterprise-grade hardware available: Who wouldn’t love Estimote’s beacons? Unwrapping my dev kit was pleasant experience, given the attention to detail that went into building and packaging them. But they are R&D toys at the moment, and not built for real operative use.
As corporation, I could care less whether a beacon is $30 or $150 a piece. Buying 356 beacon for the AnkaMall, for example, merely qualifies as noise in the financial reporting: Biggest iBeacon Deployment .
So, what would an enterprise-grade beacon look like? There are at least three features that need to be provided:
- A permanent power-supply: Try to replace a battery of an Estimote beacon and then imagine that you need to service 356 of those, all of them either broadcasting at different frequencies or shielded electro-magnetically by factors in the building in which they’re placed. So, you’ll never know when a battery has become exhausted unless you personally check each beacon in regular intervals. Not scared enough? What about a outdoor location-based advertising network, consisting of thousands of beacons, that your company is renting to advertisers for contextual mobile campaigns?
- Remote management capabilities: Don’t force me to update each beacon’s firmware by hand. This needs to be a function of the beacon management software (BMS). Which would require the beacon to have some sort of network access. And while we’re at it, let me diagnose each beacon, and turn it either on or off via the backend, too.
- Motion sensors: Tell me when a beacon is moved from it original location. And here is one reason why this is handy: If you like to reward customers each time they come to your location you create an inherent incentive to take a beacon back home. And don’t underestimate the ignorance of other staff members or contractors with little black boxes they cannot identify.
Beacon Management Software (BMS):
Enterprise-grade BMS will become the most lucrative market for software providers. The usual experience with enterprise software is that there is almost no incentive to change a running system. In other words: once a client, always a client. So, growing the user-base is the key to success for those BMS providers.
This growth will positively influenced by: hardware manufacturer independence (the BMS should handle all beacons built to the standard) and remote beacon management features (see above).
As well, enterprise will require enhanced security features such as:
- Prevention from UUID spoofing
- Provision for secure one-to-one user identification
- Multiple devices per user administration
WE’ll see performance-based licensing models come to market in which there’s:
- No set-up fee
- No device-fees
- Free SDKs
- Charging for notification delivery only.
AdSense for Locations – or the Rise of Beacon Networks:
The first beacon application idea (beyond 2-for-1 offers pushed to you upon entering a store) that came to my mind was location-based ad networks. I even measured how many beacons it would take to fully cover the epicenter of Berlin’s startup-scene–the vicinity of the Rosenthaler Platz–it’s just 130 beacons.
However, I dropped the idea because the underlying business model of renting beacon networks to mobile advertisers requires a lot of financial stamina. You requrire both network effects and a recognition that there is a low barriers to entry for competitors. (Think of railroad and telephone companies; the problem is really not new and actually worse than in the past.)
Nevertheless, the land-grab has started, see for example: “Mobiquity switches on its Bluetooth #beacon network covering 100 U.S. malls“.
Will those networks be built on a successful business-model? It will probably turn out to be profitable for two or three survivors.
Generally, consumers will not benefit that much from these kind of networks. (Why would a consumer opt in to notification spam?) Incorporating them into existing (venue) apps, however, might prove to be a better solution.
Service, Service, Service:
There are numerous use-cases for beacons and the most promising in my eyes will be those that seamlessly provide services to the users. Here are a few examples of what I mean:
Access to services that require a degree of identification, e.g.:
- Coffee-machines (Locly@iBeacon Hackathon UK), printers or copy-machines
- Electronic tickets.
- Upload your shopping-list to a retail app and once you enter any store of the chain the app is creating the perfect route for you to pick up your groceries. (No more need to memorize where stuff is in a store.)
- Pick up copies your from your newspaper subscription at a kiosk.
- Surveillance of home-care service levels (Sanitrack@iBeacon Hackathon UK).
About the author:
Stefan Wolpers is a thought leader, mentor, start-up guru and leader in the Berlin tech scene.
Share Your Thoughts
Where do you think beacons are headed in 2014-2015? Do you agree that network effects and low barriers to entry will only leave a few companies standing in developing location-based ad networks? Are there ‘enterprise-grade’ iBeacon solutions on the market?