IoT tech deep-dive: The rise of beacon technology

If Leonardo da Vinci was still alive, how would he invent the Internet of Things?

As one of the greatest innovator of all times, Leonarado da Vinci used to stick to one rule:  “Simplicity is the ultimate sophistication”.

Where is the simplicity in the IoT technology landscape? The answer may be: It is in “Beacons”: A very simple, yet sophisticated IoT technology that is on the rise. Maybe the Leonardo da Vinci of our times is working on beacon technology?

 

Intro: How Beacons and iBeacons work?

Beacons are small wireless devices that continuously transmit a simple radio signal saying “I am here, this is my ID”. In most cases the signal is picked up by nearby smartphones using Bluetooth Low Energy (BLE) technology. When the mobile device detects the beacon signal, it reads the beacon’s identification number (ID), calculates the distance to the beacon and, based on this data, triggers an action in a beacon compatible mobile app.

 

Leading use cases for beacon technology – could it change the way we shop?

Even though beacons are very simple, they are a technological advancement: They allow for indoor positioning (something that GPS is not able to provide) and subsequently indoor behavior tracking. They create a new seamless interaction that does not consume a lot of battery. Due to its simplicity, beacon technology does not need to battle as many standards as other IoT applications.

Retail

  • Retail is currently the most popular area in which beacon technology is being implemented. Beacons allow for a new way of in-store interaction between customers and retailers. On the one hand, it allows retailers a new way of collecting data about its customers, based on their in-store actions. On the other side, it allows customers to receive personalized offers based on their preferences and their online/in-store behavior.

Some statistics (April-May 2014) released by inMarket company highlight the advantages of beacon technology:

  • Interactions with advertised products increased by 19x for users who received a beacon message.
  • In-store app usage was 16.5x greater for users who received a beacon message.
  • Shoppers who received a beacon message were 6.4x more likely to keep an app on their phone, versus those who did not.

Sport venues

One of the biggest news last year was Major League Baseball’s adoption of beacon technology. They equipped 20 stadiums with more than 100 Beacons each to help visitors find their seats and to send them notifications about specific discounts.

Airports

Last year, Virgin Atlantic equipped the London Heathrow airport with beacons. The company is testing various use cases, adding new features every other week.

Examples include:

  • Specific offers – In the main area, people receive notifications about specific airline partner services (e.g., 0% commission at the currency exchange).
  • Indoor navigation – Beacons are used for micro-navigating services, leading passengers to their gates.

“Two clear opportunities for airports are offer pushes which can boost sales, such as encouraging passengers to have a coffee while they wait, or push notifications of pertinent information at check in,” says Peter Gough, founder at ORM.

EasyJet has installed beacons at London’s Luton and Gatwick airports, as well as Paris’ Charles de Gaulles Airport. These beacons allow for notifications to passengers approaching the check-in and security zones (e.g., to inform them about their obligations).

American Airlines has installed beacon technology at Dallas Forth Worth Airport and Japan Airlines at Tokyo’s Haneda Airport.

Public transport

An app called Wayfindr made by the Royal London Society for Blind People (RLSB’s) Youth Forum and digital product studio ustwo communicates with beacons installed in London’s Tube. It is used for delivering turn-by-turn audible directions to blind people, giving them better chances for navigating in London’s Underground.

 

Beacon technology – Simple but effective

At the heart of beacon technology is the Bluetooth Smart technology (also known as Bluetooth Low Energy), which enables the data transmission and defines the device.

Most beacons use BLE technology, because of its low power consumption and implementation costs. The technology only allows for small amounts of data transmission, which is why most beacons only transmits their IDs. Beacon IDs consists of a maximum of three values:

  1. A universally unique identifier (UUID)
  2. A major value (optional)
  3. A minor value (optional)

Besides these three values, every beacon also transmits information about its signal power. This information is used by the app to calculate the distance from the source.

Apple’s iBeacons

iBeacon is a brand name created by Apple inc. , that was first presented at the World Wide Developer’s Conference (WWDC) 2014 as part of Apple’s iOS 7. It is a new » technology« that Apple has implemented in its location framework in iOS 7 and newer operation systems. It lets Apple phones that are using iOS7 (or newer versions) constantly scan the environment for Bluetooth Low Energy devices such as beacons. When the smartphone identifies a beacon it can open relevant apps even if the app is closed. This makes Apple’s iBeacons solutions distinctly different from most of the other operating systems, in which apps must be running at least in background for them to react to beacon signals.

Google’s Eddystone: A beacon game changer?

On July 14, 2015, almost a year later than Apple, Google came out with its beacon project called Eddystone. It is Google’s response to Apple’s iBeacon, using a more open and flexible approach. Eddystone is Google’s open-source, cross-platform BLE beacon format. While Apple’s iBeacon standard only works with iOS devices, Eddystone works with both Android and iOS devices (using a library).

The biggest Eddystone feature, which could change the way beacons interact, is the support of multiple frame-types. While iBeacons are only able to send UUIDs, Eddystone is going one step further. Besides the ability to send its UUID, Eddystone devices can also transmit URLs, meaning that it may not be necessary anymore for customers to install specific apps.

It seems that Google has defined a new cross-platform beacon standard which will allow integration into almost, if not all smartphone platforms. Almost certainly, Eddystone will cause new IoT use cases to emerge.

 

Beacon technology forecasts: An exploding market?

As we are at a very early stage in this new technology, it is extremely difficult to make specific predictions. A recent business Insider Report makes the bold forecasts that beacon technology will see a five year compound annual growth rate of 287%. It is predicted that there will be approximately 4.5 million active beacons by the end of year 2018. Almost 80% are predicted to be used by retailers.

According to the BI Intelligence report there are beacons installed in more than 8% of all USA retailer stores. It is expected that 32% of all US retail stores will have them installed by the end of this year and 85% by the end of the next year.

 

The top 10 beacon manufacturers


Top beacon companies

Estimote: The companies System Development Kit is used by more than 40,000 developers today. Additional features of Estimote beacons include built-in temperature and motions sensors.

Kontakt: Besides BLE beacons, Kontakt offers so-callded cloud beacons that have a built-in WIFI chip. These Kontakt cloud beacons have the ability to connect via WIFI and manage all bluetooth beacons within the range.

Radius Networks: The company offers beacons with more power options than other beacon manufacturers. Their beacons have options for AC power, USB-Power as well as long-life coin batteries.

Bluvision: Bluevision doesnt only focus on making beacons but also the managment platform for the beacons. The BluZone Cloud Ecosystem provides complete cloud control and device access to facilitate worldwide beacon deployment.

Bkon: In addition to selling its beacons, the company is making the beacon’s compatible with Google’s experimental Physical Web project.

Signal360: Signal360 beacons broadcast both standard and patented audio signals, therefore reaching also smartphone users that are not using Bluetooth.

Bluesense Networks: Bluesense Networks are known to produce beacons that operate even for longer ranges. They are made on a BlueGiga BLE121LR long range module which can reach more than 200 meters  (up to 450 meters in clear line of sight). Similar to Kontakt, the company also offers HUB stations with wifi and ethernet connection options.

 

Trends and Outlook

With Google and Apple now actively pushing Beacon technology startups and with successful business cases emerging at retail stores, airports, and other places in the world we can expect the Beacon market to further accelerate. Google’s recent launch of Eddystone is showing that the space is still seeing the emergence of new standards and features, that will subsequently trigger new use cases. Besides the big players, there are a number of startup companies, that will play a significant role in determining the future of beacons. Some of them are dreaming to become the next Leonardo da Vinci.