Tuesday, October 1, 2013

Apple Will Win the Indoor Location Race with iBeacons, especially with Retail Stores

Google has been trying for years to scale its indoor maps and indoor location positioning coverage. Well, after 3 years or so, Google has not been very good at scaling this effort. To date, it has "only" 10,000 indoor map venues *worldwide* (most of these are airports and malls, but does not include retail stores like Macy's inside those malls).  Only a small fraction of these venues are enabled with the indoor positioning (the "blue dot"). Why, even for Google, it's so hard to scale indoor maps and indoor location?

First of all, Google needs to receive floorplans from the venues and upload it to its Google Maps system. Second of all, Google needs someone to RF Fingerprint the venue so that it's indoor blue dot technology works at that venue (read here). Both of these require the venue's owner participation, which is a big challenge when it comes to retail spaces, which don't trust Google for number of reasons; e.g., Google's advertising technology acting against the retailer. For example, Google Maps for indoor spaces like Home Depot can show ads for Lowe's. It would be stupid for Home Depot to give its data to Google. Google has the advantage of "abusing" Home Depot's data and targeting Home Depot customers to go to Lowe's (after Lowe's pays Google advertising fees to target customers who are at Home Depot).

With Apple and iBeacons, retailers will be able to control their space and ecosystem. Retailers will be able to easily arrange multiple beacons to enable indoor location services at a very low price (cheaper than WiFi location systems or NFC tags). In addition, the accuracy of iBeacons Bluetooth location technology is much better than WiFi based location systems (i.e., precision, latency, etc).  Retailers like Macy's and chains like Starbucks, even MLB stadiums, are testing and deploying iBeacons for 2014 launch of micro location and proximity services.  More retailers will consider deploying beacons when every single person with an iPhone can be marketed to and be engaged for better customer services and or increase in purchases.

Read more in our Market Report here