iBeacon Feels the Squeeze: Adapt (or Die?)

ios8-ibeacon-challenges

iOS8 is a monumental move towards devices that are more connected, more aware, and increasingly powered by iBeacon and Bluetooth LE technology. And yet in spite Apple shifting the emphasis from the screen to the world around the screen, iBeacon device makers are about to feel the squeeze.

Google is expected to follow suit with announcements (such as a contextual awareness via its Nearby feature) at their I/O conference at the end of the month.

These combined moves will result in an equally massive shift amongst beacon device makers. We expect to see rapid consolidation, some of the beacon “makers” fading from the scene, and others changing their business models.

As an industry, proximity devices and software tools will explode. And yet the first generation of early innovators will face an intense pressure to grab market share, improve their products, and respond to an increasingly demanding marketplace.

4 Ways Apple Changed the Game

iBeacon wasn’t on center stage at WDWC. (Mind you, neither was maps due to rumored internal divisions and problems with execution).  And yet the philosophy that underpins beacons was very much in evidence. As we said yesterday:

If beacons allowed our phones and tablets to see the world around them in a new and profound way, Apple has just launched a new philosophy and approach for the purpose of computing: to connect it to the physical world

The physical world, until now mostly ‘dumb’ and disconnected from our devices is, for better or worse, waking up, and our devices are responding. There is no offline. And last week, Apple demonstrated that nearly everything it’s doing to enhance its platform is directed at that fact.

But once we got off the main stage, it became clear that Apple had a few tricks up its sleeve that would have a very tangible impact on iBeacon. Here are four key take-aways that will impact iBeacon experiences:

Game Changer 1. Indoor Mapping

If you own a store, museum or other location you can now ‘register’ for indoor mapping. Let Apple know whether your location has WiFi, iBeacon and other technologies; load up a map of your store; and you can then embed wayfinding and other features into your app.

This is a significant change, and comes in direct competition with similar efforts by Google to do indoor mapping and to “own” location registration. But it also slices off a significant iBeacon use case: indoor wayfinding (something which iBeacon was never designed to do, and required extensive “hacking” to try to get it to work well).

If a store was looking to use beacons to help consumers find their way from the front door to the shoe aisle, this new feature eliminates the need for beacons in the first place.

You can think of it as ‘narrowing the range’ of a beacon – instead of using beacons, you can use the equivalent of indoor geofences.

Take-Away: Over the past year we’ve had hundreds of questions and seen dozens of companies building ‘wayfinding’ around beacons. Those use cases have (mostly) disappeared.

Game Changer 2: App Promotion

Location registration comes with a major upside: if you register your app and venue with Apple, they’ll promote your app on the lock screen of a user’s device. Arrive at the museum, and your user will see a little icon on their lock screen telling them that there’s an app specific to that location.

Take-Away: An iBeacon experience only works if your user has an app. Apple just made a game-changing move to make it easier to promote your app at your location.

Game Changer 3: Notifications and Widgets

Apple finally caught up with Android, creating a better “home screen” experience for notifications and ‘granular’ interactions with apps. As Wired reports:

Interactive notifications will spur all sorts of new behaviors. (And yes, Android already has interactive notifications, but the ones in iOS 8 look to go beyond what KitKat can do.) Some of these will be simple, like the ability to reply to an email or text message. But they’re powerful in that you can do this without quitting whatever you’re already doing. And this interactivity is not just limited to system apps. Third-party developers can take advantage of this new capability as well, so you could comment on something on Facebook, respond to a tweet, or even check in on Foursquare. But others are going to be radical, stuff we haven’t imagined yet. Once developers begin to really harness what interactive notifications can do in iOS 8—and they will—it’s going to cause one of the most radical changes since third-party apps. With the advent of iOS 8, notifications are the new interface frontier.

This will spur all kinds of new user behaviors triggered by beacons, and will shift some of the interactions from the app itself to side widgets and the ‘notification layer’.

Take-Away: You need an app to react to a beacon. But the focus has been on in-app interactions. Notifications creates a new “layer” for how users will be able to interact with beacons.

Game Changer 4: Privacy and User Choice

Apple has, again, “turned the dials” on user choice and privacy. While iOS7 gave us the ability to respond to beacons even if your app was closed, iOS8 returns some of the choice to consumers, allowing them to ‘toggle’ whether they want an app to be location-aware and at what times.

A new feature called “visit monitoring” puts more power back in a user’s hands, as 9 to 5 Mac reports:

Apple is adding a new authorization request type in addition to the one it currently does for apps that ask for permission to access a user’s location. The new type of authorization is called “When In Use” and allows developers to ask for permission to only use location data when an app is in use. Previously Apple had a single authorization type referred to now as “Always”. What this means for users is a new blue status bar for apps that opt to request “When In Use” permission to let them know the app is currently getting continuous location data in the background.

Apple has also closed the door on anonymous device tracking (a move that puts a question mark on the business models of companies like Turnstyle) by anonymizing the device ID that your iPhone transmits – similar to ‘masking’ the UUD that an iBeacon device transmits.

3 Challenges for iBeacon Manufacturers

In addition to the above, which are on their own game changers in how a proximity experience is designed, the introduction of HealthKit, Home and Swift will each have deep implications for iBeacon device-makers and their related software services.

These combine to create a tsunami of challenges for iBeacon and Bluetooth LE device makers.

Challenge 1: Demand Up, Prices Down

Apple’s changes are the tip of the iceberg. More rapid adoption of Android Kit Kat is bringing a massive new user base to proximity experiences. The changes by Apple will help overcome lingering doubts about app downloads, wayfinding, user experiences, user choice (and fear of spam), privacy and engagement.

More devices powered by BLE in the home will drive a larger demand for devices, which will have a collateral effect on the iBeacon markets in retail and other venues.

Demand will go up, but per unit costs will plummet. And yet continued problems with the BLE supply chain (especially out of China) will challenge device makers to deliver rapidly at a lower price point.

Challenge 2: Swift and Android Are Not An Option

Check most of the iBeacon device sites out there, and most of them announce that Android is “coming soon”. But just as they get poised to launch Android support, device makers will also scramble to support “native” Swift (meaning in more than just an “import Objective-C into your Swift project kind of way).

With Google announcing its next suite of tools, this will leave device-makers scrambling on two fronts, and casting a glance over at Windows and Samsung’s shift to Tizen.

Challenge 3: Wearables and the Home

And the game is about to change again. Apple’s iWatch is projected to outsell the iPad. And it’s anyone’s guess whether its launch will be coupled with changes to the iBeacon protocols. It will certainly drive new notification interactions and we can expect to see iBeacon experiences shift from your phone to your wrist.

Combined with home automation, we’ll also start to see cross-over products: beacon-powered devices for your living room that wouldn’t look out of place in a coffee shop.

What’s Next? 3 Predictions

While challenging, these are exciting times. 10,000 developer kits by Estimote looks like pocket change compared to what’s ahead. And yet the changes we’re seeing this month will lead to some pretty tough decisions by makers of iBeacon and Bluetooth LE proximity devices.

How will they respond? Expect to see at least three strategies.

Prediction 1: Move Into the Home

We’ll see beacon makers shift from retail into the larger, more competitive, and potentially more rewarding market: the home. Beacon makers will decide that the retail market has become too demanding and price-sensitive and will retool their business models to package beacons up with simple use cases for home automation and proximity detection.

Prediction 2: Shift From Beacon to Proximity/Location

Sorry, but beacons alone don’t cut it. With indoor mapping, integration into local WiFi detection, and changes to notifications and consumer privacy agencies will expect a lot more from their beacons than just fleet management. Cloud-based services will need to support indoor mapping, push notification support and management of collateral technologies.

Prediction 3: Down To the Metal

Instead of competing on “cloud”, device makers will dive deeper into the metal and their beacons will become more powerful. Beacons will combine with ARM processors, local hubs, distributed computing and mesh networks, while leaving ‘services development’ to others. These moves will be pursued aggressively by companies like BlueGiga, Nordic and Texas Instruments and will power second and third generations of beacons that make today’s devices look like toys.

Challenging? Yes. Transformative? Definitely

The world has changed forever and will be a different place in the years to come. Connected homes, quantified selves, mesh networks and nano satellites – things that seemed like dreams or scenes from a movie will be visible and real in the years ahead.

And in a few short months, the “becosystem” will also be radically changed. Stressful, nail-biting, life-altering? Yes.

But hey – we all knew what we were signing up for – a chance to change the world and participate in the creative destruction that comes with turning the physical world into the new digital interface.

Share Your Thoughts

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Has the game changed for iBeacon? Do things like indoor mapping make iBeacon more or less relevant? Are the makers of iBeacon and BLE devices looking at opportunity, or challenges in the months ahead?

7 Responses to “iBeacon Feels the Squeeze: Adapt (or Die?)”

  1. Great insight, wow! Apple does have a disruptive micro-location master plan which is nice to see. But, since Apple is not an environmental design or architectural firm that sits closer with user experience in physical spaces, we will see them rethink their approach again and again and that is OK, we are all this ride together. What Apple has seen with their own retail beacon deployment is how challenging beacons are and how consumers want it all (and demanding it), they want great experiences with integrated features and most definitely NO proximity marketing beaconing…

    Reply
  2. Thanks for compiling all of this information Doug. Just as you mention in your article, Texas Instruments is making moves. They just announced their SimpleLink devices that will allow engineers to add WiFi to everything. As you said, challenging and transformative.

    Reply
  3. Doug, good post, but the reference you have for Visit Monitoring is incorrect. What’s you’re quoting is the new “When in Use” permission, not Visit Monitoring. Visit monitoring is a new way in iOS8 to determine places which are interesting to the user through different cues from the device (e.g. frequency, repetition, duration of visits to a particular location; if you always charge your phone in a location, it’s probably your home).

    Reply

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