iBeacon - common misconceptions

I am frequently hearing couple of misconceptions about iBeacons and I just want to clear those in this post.

Misunderstanding 1 - I understand a iBeacon device transmitting standardized coupons. But how does the iBeacon device transmit customized offers? How will iBeacon device be enabled / connected to recognize a customer / his preferences and then send relevant offers? Can the iBeacon tag be programmed to relay some identification back to the server to enable BLE tag to offer something customized? 

iBeacon cannot transmit any offer/data other than constantly emitting a signal. Think about it as a lighthouse that constantly beams light. The mobile app on the smart app listens to these iBeacon signals and sends the signal to the merchant backend servers in the cloud along with the customer info (who ever is logged in on the phone). The server can identify the exact beacon by interpreting the signal. 

For ex: Beacon in Men's apparel section in Macy's on Broadway Street, New York emits the signal and the app on Joe's smartphone sends that signal to the backend servers. Now based on the location and based on Joe's past history/preferences/interests, Joe can receive the custom offer on his smartphone. I will talk about the signal characteristics and how you identify Men's apparel section in Macy's New York store in next question, but remember that offer is pushed from internet to smartphone, not from iBeacon to smart phone. iBeacons sends a signal and the signal gets converted into personalized coupon and pushed back to smart phone from merchant's back end servers as illustrated below:

Misunderstanding 2 -Someone walks into Macy's with their phone turned on. As soon as you come in proximity of a iBeacon tag, can the tag prompt you to enable / accept a Bluetooth pairing? How fast can this pairing be established? How does the iBeacon tag recognize an eligible phone for pairing?

The first time you install Macy's app on your smart phone, you can enable/disable in-store notifications. If you enable, you receive the coupons/offers as soon as you enter into the beacon's zone, magically no pairing required. If you disable, you cannot receive notifications/offers/coupons. Enabling notifications is one time thing, and unlike regular Bluetooth you don't need to pair with iBeacon. How do iBeacon tag recognize an eligible phone to send the signal? iBeacon tag won't recognize eligible phone, instead phone (the app on the phone) will recognize eligible iBeacon signal. Being said, this is the time to get into the beacon signal characteristics.

Every iBeacon device emits signal constantly. This signal is nothing but an identity (unique identifier) of iBeacon device. Every ID is 20 bytes long and is divided into three sections: proximityUUID (16 bytes) + major number (2 bytes) + minor number (2 bytes).

UUID is a property, which is unique to each company/chain of shops.

Major is a property, which is unique to shop or you use it to specify a related set of beacons.

Minor is a property, which is unique to aisle, or you use it to specify group of products or you use it to specify an individual product/beacon.

For ex: see the below screenshot:

When a smartphone is running Macy's app, it can be programmed to look for the Macy's UUID. In the above example, it is "B9407F30-F5F8-466E-AFF925556B57FE6D".  When Joe walks into Macy's store, the app on his smartphone detects this UUID and it looks at the major and minor values to determine which of the Macy's store you are in as well as the aisle your are in. So the major of 28600 indicates it is Macy's on Broadway Street, New York and minor of 55855 indicates it is Men's apparel section. Now the app sends major, minor properties along with Joe's userid to backend systems and in return Joe receives personalized coupons based on the aisle he is in and his past history etc.

Original post - BLE/iBeacon - common misconceptions

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iBeacons vs. other payment technologies (NFC, Geofencing)

Here is a quick comparison of iBeacon with other mobile payment technologies:

General	Phone can communicate to the cloud/online payment service provider without a signal (great for thick concrete walls, Victorian buildings)
Geofencing	Drains battery life, less accurate, requires pre-selecting a limited number of locations, relies on Wi-Fi or cellular network
NFC	Requires you to pull out phone to pay (slower to tap a phone), requires NFC-enabled phone
Regular Bluetooth	Drains battery
iBeacon	iOS only
Other Beacons	iOS and Android

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With iBeacon, Apple is going to dump on NFC and embrace the internet of things

I wrote a guest post for GigaOm on iBeacons in which I detailed how Apple is going to embrace Internet of Things and dump NFC. I also detailed about significance of iBeacons in indoor location based services and in-store marketing. Google is betting on NFC, but Apple is moving forward with iBeacons. Here is the Gigaom post - With iBeacon, Apple is going to dump on NFC and embrace the internet of things.

Nor did Apple say anything about it during the iPhone event Tuesday. But I’m sure this is going to be a big deal, and startup companies like Estimote agree, announcing its support for Apple’s technology Tuesday and releasing this demonstration video. 

Why is that so? For a couple of reasons: it opens a door to new set of applications such as indoor maps and in-store marketing, it makes the internet of things a realty and it might kill NFC (near-field communications), the wireless technology most linked with mobile payments.

Even CNN picked up the article from GigaOm. Here is the CNN link.

Wall Street Journal used excerpts from my GigaOm article - What People Are Saying About the New iPhones.

Hari Gottipati writes on GigaOm about what wasn’t talked about at the launch: iBeacon, a bluetooth-powered location technology that will ship inside iOS 7.

Gottipati’s rational on why iBeacon might kill NFC:
NFC tags are pretty cheap compared to NFC chips, but NFC tags are required on each product because NFC works only in very close proximity. In theory, NFC range is up to 20cm (7.87 inches), but the actual optimal range is less than 4cm (1.57 inches). Also, mobile devices need to contain a NFC chip that can handle any NFC communications. On the other hand, iBeacons are a little expensive compared to NFC chips, but iBeacons range is up to 50 meters. Not all phones have NFC chips, but almost all have Bluetooth capability.

This kind of technology gets us closer to the Internet of Things, Gottipati writes. 

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