Kontakt to its Customers: You’re All Doomed

Screenshot 2015-07-24 08.20.14

Kontakt, one of the largest manufacturers of beacons, has a message for its customers: you’re all doomed.

In what might rank as one of the more bizarre examples of corporate messaging, the company’s founder has taken to LinkedIn to pronounce that with the arrival of the Eddystone beacon protocol (and related services) by Google, proximity companies are headed for the dust bin if they don’t radically change (and soon).

“Ask not for whom the bell tolls, proximity devs: it tolls for thee,” proclaims Szymon Niemczura.

But extending the logic of Szymon’s article, you can’t help draw the conclusion that it isn’t just the devs who will pay the price for Google’s entry into the market.

If you’re a retailer, a brand, a museum, a car company, a city or a theme park – you too should just throw up your hands and give up now.

Google will own mobile moments, the borg has arrived, and closed off becosystems will look something like AOL in the years to come: a walled garden that no one visits anymore.

And Apple? Naw. Says Szymon:

With a vanishing share of the smartphone market, the last thing the house that Steve built wants to do is give developers even more reason to jump ship.

Ah yeah. Poor Apple. Poor shrinking tiny little Apple. It’s hard to remember that they’re still around! It will be cute to see what little features they try to throw at us to protect their ever-vanishing market share and profits.

What’s Your Secret Sauce?

Now, I like Kontakt. They’re some really really smart people.

(Although, what’s with the videos that look like they were shot at summer camp? And by the way – audio engineering is a thing).

So maybe they have a secret sauce as Szymon claims: “At Kontakt.io, we think we’ve found our special sauce that will keep us growing and thriving as giants of the Internet space like Google, Apple, Facebook, and others compete over who earns what from the IoT.”

In response to which I have a question: China?

Because if Szymon’s observations are true, then the beacon itself has become king. The app layer, the SDKs and the software, the cloud services and back-end analytics will be swallowed up by the Web.

The promise of Eddystone is that you can turn your beacon into a Web endpoint and simply broadcast a URL.

And if that’s true, then it opens up the opportunity to flood the market with cheap beacons from China that do nothing more than broadcast a URL.

Do You Jump Into Bed With Google?

Setting aside the tone of Szymon’s article, it points to a larger question.

Because what’s clear is that Google has hit a home run. Eddystone is everything a beacon should be.

Google took a page from the Apple playbook: wait for the industry to develop, cherry pick the best ideas, and then come out with something that does everyone else one better.

The Eddystone format is brilliant.

But now you need to make a decision: do you go “all in” with Google, do you try to find a middle ground, do you focus on the “app-less” layer or combine different proximity experiences to create a unified customer journey?

Creative Tensions Between Open and Closed Systems

The way you answer the above questions will have a big impact on what kind of beacon you buy and what kind of customer experience you want to create.

In an interview with Kontakt, they clearly think that the “app-less beacon world” is a big deal:

Along with yesterday’s release of new Chrome browser for iOS with support for a Physical Web standard this became clear – proximity devices are able to communicate with our phones without the need for other apps. This means a Physical Web is finally visible and ready for broader adoption.

But here’s the problem: what does “communicate with our phones” mean?

Is that all we really want to do? Is your vision of the mobile world one in which the Web has won?

Szymon is right:

“10 years in Internet is effectively forever, and it’s a rare startup that considers what the landscape will look like as far out as two years, but this matters, so I’ll point it out: native capacity to push alerts and more direct from beacons to devices kills a huge number of app use cases.”

Truly, the traditional definition of an “app” is eroding.

There will be apps that sit on your phone but that you’ll never use on their own. Instead, they’ll be shared as ‘sheets’ inside other apps, provide deep linking capabilities, and sit as a kind of invisible thread across an ecosystem of experiences.

But that doesn’t mean that apps will be replaced by whatever Google has to offer, anymore than it means that HTML will win in the war against native.

Which is why Eddystone does more than just broadcast Web pages (although its ability to do so will open up some pretty great user journeys).

Like many engineers, Kontakt seems to be more interested in the transactional nature of systems than the very real human experience they entail.

(Just look at Kontakt’s Web site or its developer portal and you’ll see what I mean – they feel like were designed in 2002 by a bunch of engineers one weekend).

The implication here is that in the tension which will always exist between open and closed systems, the pendulum has swung: open will win, Google is right, native is disappearing and apps are dead.

If you’re willing to make that bet, great. Go for it. At least you’ve taken a stance! And perhaps in the longer arc of history you’ll be right – but until then we still have to worry about today.

What Kind of Beacon Will You Use?

In response to questions about Eddystone, Kontakt tells me that you’re going to need to make a choice (at least for now) in which of their beacons you choose: Eddystone OR iBeacon.

Why? Because battery.

In an interview, Kontakt tells me:

Our beacons broadcast 4 different frames one after the other: 3 advertising packets (Eddystone-UID, Eddystone-URL, Eddystone-TLM) and a scan response. To the best of our knowledge, Kontakt.io is the only company on the market who has offered that from day one.

We have been investigating the possibility to add also an iBeacon frame to the set, but broadcasting that many different packets is going to cause a pretty heavy battery drain. While we research ways to help keep a useful battery life on our product, we will also be looking at client demand for this feature. We don’t have any timeline on when we may roll this out, as it’s very much just in R&D right now.

Which is odd, considering that if you don’t interleave with iBeacon, then your beacon battery might be fine, but the iOS user’s won’t be. By relying on Core Bluetooth instead of the native framework from Apple, you can expect Apple users to take a hit on battery life if you’re solely relying on the Eddystone format.

These kinks might be worked out, but it’s an obfuscation to say that it’s your beacon’s battery which is the sole limitation.

In fairness, Kontakt isn’t entirely advocating a “throw out your iBeacons” stance. If you’ve got some of those old beacons lying around then sure, why not, you should hang on to them. (But I guess you should know that you’re missing out on some huge potential):

Every discussion regarding iBeacon and Eddystone formats, and which one fits our client needs better, always starts with a question about use case details. Eddystone opens new possibilities, but at the same time requires more complicated coding to integrate as it sends more types of data than iBeacon does. Beacons that use Eddystone-TLM format to send telemetry data (such as temperature data) will have shorter battery life because they are sending more data packets etc. All of that needs to be taken into account before we jump on the Eddystone bandwagon.

In general, I think that “switching” is probably not the correct choice for anyone with a live deployment right now. Anyone with a P.O.C. that’s running, though, or someone who’s in early tests? I would strongly encourage that those people try this out because this whole platform is growing in exciting ways and has huge potential.

For many use cases, an Eddystone URL format beacon might be fine. You might be able to move the needle a bit on customer engagement.

For everyone else, there are larger questions at stake.

Kontakt itself hints at this future. With the coming wave of mesh beacons, the company’s Cloud Beacon takes aim at what will happen when the next Bluetooth specification starts hitting the market. The company tells me they have big plans, and that those plans validate why its Cloud Beacon format isn’t threatened by Google’s Proximity API:

Our Kontakt.io Cloud Beacon remains the only enterprise-level tool for beacon monitoring that we’re aware of: if you need to be able to guarantee that you are scanning and looking at beacons in a given area at regular intervals, a Cloud Beacon is your best bet. On top of that, Cloud Beacons are part of our other real competitive advantages: security and sharing.

In the future we will introduce completely encrypted channels for communication between beacons, cloud beacons, and smart devices. This, combined with powerful features such as our scheduled profile shuffling (driven by our API) and the industry’s only Power Sleep mode designed to extend beacon battery life, means that the Cloud Beacon still has very strong USPs that make it an attractive prospect for any company looking to roll out beacons on the large scale.

An Industry Transformed

The industry has been transformed with the launch of Eddystone.

For beacon manufacturers, a new wave of low-cost alternatives from China will put pressure on them to tighten up the value-added services they provide, the relationships they have with developers, and the level of execution they put into their user documentation, community management and marketing.

For developers, the range of opportunities has expanded rather than contracted.

But while Eddystone might seem to cut through the clutter and remove barriers in app development it also creates a richer, and thus more complex suite of choices for brands, retailers, cities and cultural institutions.

I have deep faith in this industry.

I don’t need to give any of you a wake-up call or tell you that you’re doomed. Because for the 100s of proximity companies I’ve talked to, and for the hundreds of brands and retailers we’ve interacted with (and who are doing their best to make sense of a rapidly changing world), I’ve found that optimism in the face of progress is the best guarantee of innovation.

And this week, we’ve entered a new era in which to thrive.

Share Your Thoughts

Join our e-mail list for more on iBeacons and BLE. Join the conversation on Twitter, or connect with me on LinkedIn.

How will you respond to Eddystone? Is this a new era of doom or one of innovation?

6 Responses to “Kontakt to its Customers: You’re All Doomed”

  1. Dear Doug,

    Yes everybody is doomed, but only if your value proposition is trivial and can be easily replaced with a combination of any [Google Service Name] + Beacons. So, it’s it’s not a wake up call, it’s a way to think about the future and it’s giants.

    And yes, Apple market share is dropping in developing countries (where the economy growth actually happens and will happen over next 5-10 years). Not to mention a broader market of all the devices running Android.

    I’m happy that my favourite writer joins the conversation. Especially cutting this in such a dramatic form! I love it! :-)

    Have a great weekend! :-)

    Reply
  2. DTAG100, the most advanced ready made USB go to market OPEN beacon hardware that is ready and compatible for Eddystone!

    I wouldn’t suggest that ‘Google wants you dead’, but more like this is a fair warning signal of a profound game changer in the way in which we reach our audience. Therefore take heade.
    Mobile users are increasingly reducing the amount of Apps they download and only concentrating on the ones they frequently use for a purpose. One of the main reasons behind this is device battery life, and the more Apps running in the background continually searching for information eats away at the battery life.

    When it comes to the hardware it is also vital to make the right choices and battery powered beacons just aren’t going to make the grade if you are looking for performance.
    Eddystone has certainly whet everyones appetite with being able to broadcast a single URL, but saying that, it is still important to remember that the user will require some form of connectivity whether it be wifi or 3g in order to launch the relevant URL, unless the content is previously been made available offline.
    Talking about the transactional nature of beacons and the opportunities that opens for brands to connect with their consumers, this has not been possible using iOS specifications because they do not allow you to connect devices with beacons. This has however been possible with Android and iOS but not if you are using ‘iBeacons’, as they can only be used to broadcast one way.

    Moving away from battery beacons, the DTAG100 being an intelligent USB connected device is able to broadcast not only at full power continuously, but it is also able to emulate multiple beacons concurrently or even alternate between being a dedicated iBeacon, a Placedge beacon, a proprietary beacon and now even an Eddystone beacon.
    Being USB connected, when you are connected to your host system, the DTAG100 appears as a mass storage device, and therefore ALL attributes including the URL destination can be dynamically changed at any time. This enables agencies and programmatic scheduling platforms the opportunity of being able to change the beacon experience in real time.

    Google have more recently adopted’ moments of truth’ during the consumer journey being
    Stimulus (display & OOH Advertising to essentially whet the appetite), Zero Moment Of Truth (the first point at which the consumer takes a serious interest in the product/brand, ie web or print media search, or a notification), First Moment Of Truth (the actual point of purchase, either online or in the physical world at the POS), Second Moment Of Truth (the point when the consumer opens the packaging and or takes actual ownership of the product) and Ultimate Moment Of Truth (the point when the consumer wishes to share their delight via social media) as well as digital touchpoints. Beacons along with the ability to broadcast a URL creates an ‘INSTANT ZMOT’ and the nature by which the message is delivered will ultimately lead to an increase in conversions being FMOT! A combination of digital touchpoints along the way initiate the stimulus through to instantly being able to share their moments across social media, leading to an increased level of interest and conversions. Notifications will soon be as vitally important as SEO, Adwords, PPC, SEM because their audience reach will be contextually relevant ie right place, right time and right person, as well as being instantly actionable.

    Reply
  3. An interesting time indeed Doug, and as usual a very interesting read.

    @Szymon what is your secret source, or you Value proposition?
    I’m sure if like you suggesting : It’s a pretty solid one then you won’t mind sharing it. Is it a hardware beacon that supports eddystone ? A quick search reveals cheap beacons from china : http://www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=eddystone ranging from $1-$20. With the possible increase in adoption this price will only lower.

    Let’s readjust your formula from [Google Service Name] + Beacons to the reality [Google Service Name] + [CHEAPEST BEACON from ANY WARE]

    It is a very interesting time in the beacon world and it seems like an opportune time to build partnerships, especially from companies like Kontakt.

    Best regards

    Reply
  4. Dear Doug,
     
    Thank you for the incisive article. Eddystone’s release is truly significant. 
     
    I agree with your point that the possibility of a flood of cheap low-grade products mass produced in China must be dealt with by beacon providers. As a company with 70 percent of the China market share, Sensoro has constantly had to fight against issues of rampant copyright infringement and the threat of low-cost competitors. In our experience with clients in China and worldwide, we have found that clients will often try out several cheap alternatives to our product. However, Sensoro was able to reassure its clients that cheaper alternatives could not achieve the same results in proximity, battery life, and signal coverage as desired. We overwhelmingly noticed that clients will in the end choose quality over price difference.
     
    We have found that clients choose a beacon provider not only because of its quality hardware, but also because of its accompanying software and customer support. Even when selling to clients that are capable of developing their own software themselves, our software support team is usually needed through the development and deployment process. I firmly believe clients choose a beacon manufacturer because they trust the services they provide. Especially in cases of mass deployment, clients will be unwilling to deal with issues of maintenance where their manufacturer cannot provide the needed support or management software. It is our hope that Apple and Google increase the certification requirements for beacon providers, preventing the possibility of low-quality beacons flooding the market altogether.  
     Sensoro’s experience of dealing with low-cost competitors in the end will strengthened our position in the market, which I hope is of some encouragement to others in the industry.
     
    Best,
    Patrick

    Reply
  5. Josy Martins

    Dear Doug,
    Thank you for a detailed and educative article.

    As someone who is new to the beacon advertising business, I would like to seek you opinion on the best quality beacon manufacturer with iOS anf android compatibility without a monthly subscription but as a stand alone.

    Thank you and happy new year.

    Reply

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