Apple’s announcement of extended support for its “iBeacon” platform in the latest version of iOS has made beacons a hot topic. The technology is set to drive a new level of proximity-based services in smartphones and other mobile devices. But what exactly is a beacon? Let’s take a closer look at the technology and its applications.

A beacon is essentially a low-cost Bluetooth® Smart wireless transmitter, designed for indoor use, which is placed in a particular location or point of interest. The beacon transmits its identity to any Bluetooth Smart Ready devices within range; those hosting a companion app can be located and the software can trigger various types of notifications. It could be that suitable information about that point of interest is displayed, or devices may allow audible alerts or vibrations.

Because beacons have the potential to locate smartphones indoors to within a few meters, they could potentially provide a kind of indoor GPS, but crucially, they could also allow content specifically targeted to that location to be delivered to users who want it.

The development of Bluetooth v4.0, the technology behind Bluetooth Smart (which uses technology that adheres to the Bluetooth specification’s Low Energy Core Configuration and was previously called Bluetooth low energy) and Bluetooth Smart Ready, has made the whole beacon idea feasible; devices with the right hardware can now communicate over reasonable distances using only a very small amount of power, essential for battery life in today’s mobile devices.

Beacons themselves, depending on the exact implementation of the hardware, can achieve up to two years of battery life from a single coin cell, despite a range of more than 50 metres. In fact, Bluetooth Smart uses such a small amount of energy, it lends itself to technologies like energy harvesting that do away with the battery altogether. This can only help the adoption of beacons, since never having to replace the battery can reduce maintenance requirements.

Promoted by Apple
While the idea of using Bluetooth Smart beacons for indoor micro-location has been around for a while, a recent move of support from Apple means it looks set to enter the mainstream. Apple’s iBeacon platform launched in 2013, but, with the 7.1 version of iOS , Apple gave the technology another boost. With the new operating system, devices were set to automatically listen for beacons, even without a beacon app running on the smartphone. This functionality also makes it harder to switch off notifications once the app is installed.

Although Apple is pushing its iBeacon platform for its Bluetooth Smart Ready iPhones, iPads and iPods, the technology is actually platform-independent – any Bluetooth Smart beacon can communicate with Apple’s devices, since Bluetooth wireless technology is inherently interoperable. This means any manufacturer’s beacon can communicate with Android devices and other smartphones that are equipped with a Bluetooth Smart Ready capability, too.

Beacon technology has been compared to other location-based technologies such as near-field communication (NFC), especially since Apple’s version of NFC, AirDrop, uses Bluetooth technology to function. While NFC was designed for mobile payments, Apple uses its iBeacon technology for payments when users in the Apple Store check out with the company’s app.

In practice, Bluetooth Smart and NFC are very different. NFC requires the sender and receiver to be very close together, usually within a centimeter, requiring the user to deliberately position their device next to the other terminal. In contrast, Bluetooth Smart does not require such close proximity, operating over a range in the order of tens of meters, so can be used to communicate with smartphones that are still in the user’s pocket. NFC also requires additional dedicated hardware in smartphones, whereas most have Bluetooth Smart Ready capability as standard.

Another factor driving beacon technology is that Bluetooth Smart ICs are widely available from many silicon vendors, and support infrastructure exists that can make beacon hardware and software development as straightforward as possible. For example, Nordic Semiconductor offers a beacon reference design, based on its nRF51822 System-on-Chip (SoC), which can be used to get iBeacon or proprietary beacon designs for iOS or Android smartphones up and running quickly (see Figure 1). The kit features companion smartphone apps for iOS 7 and Android 4.1/4.3 smartphones, plus Nordic firmware.

Figure 1: Nordic Semiconductor’s beacon reference design kit makes designing beacon hardware and software easy

A sticking point for beacon design is typically the RSSI (received signal strength indication), which is used to estimate the distance between the beacon and the smartphone and is essential to determine the smartphone’s location. The RSSI can differ between smartphone models because of the electromagnetic profiles of their enclosures.  A beacon kit can have a tuning function included that allows consistent performance, regardless of which smartphone the beacon is communicating with.

Beacons in context
Given the high penetration of Bluetooth Smart Ready smartphone technology, the market potential for beacon technology is huge. Business Insider estimates that there are over 200 million iPhones and iPads currently deployed that are capable of acting as or receiving signals from iBeacons. Of course, once Android and other devices are added to the mix, the market potential grows even bigger. ABI Research puts the space at $5 billion today, but predicts a rather modest Bluetooth Smart beacon deployment figure of 20,000 by 2015. By 2018 however, ABI projects that more than 800 million smartphones will be actively using indoor location for applications, making the technology as widespread in smartphones as GPS is today.

As for what this market will look like, ABI speculates that the development of technologies like sensor fusion for handsets will enable a whole new set of consumer applications. These potential applications will span ambient intelligence, social networking, corporate and enterprise, fitness and health, mobile advertising, and gaming. However, the biggest focus will be on retail.

Figure 2: Estimote’s Bluetooth Smart beacon product enables retailers to provide proximity-based advertising

Retail offers a major use case for Bluetooth Smart beacons in the form of contextual advertising. Smartphones with the retailer’s app installed can be located with enough accuracy to tell whether a consumer is in the wine aisle or perusing the dog food, and use this information to send appropriate coupons to help make a sale, in the form of push notifications about deals and discounts. However, there are almost unlimited potential applications out there, from providing information about exhibits in a museum, to finding ‘dead zones’ in large stores. Notifications could be used to entice users into certain areas of the supermarket, or perhaps to the cinema in a shopping mall with a well-timed special-offer on popcorn.

As an example, Virgin Atlantic has recently implemented beacon technology in its areas at London’s Heathrow Airport. The beacons, from designer Estimote, send notifications to those passengers who have downloaded their electronic boarding pass to the Apple Passbook app. The boarding pass can be popped up automatically as the passenger nears the gate, or passengers entering the airline lounge areas can be sent a welcome message. Alerts about boarding times, and duty-free special offers, are also possible.

Of course, since beacon technology uses push notifications, there is the possibility that too many notifications or the wrong type, instead of being seen as useful information by the consumer, would simply become annoying. Supporters of the technology point out that since users have to install the app of a particular company they wish to receive notifications from, they can easily remove the app if they wish to opt-out. Ultimately, widespread adoption of the technology by the consumer could come down to retailers keeping their notifications as helpful and unobtrusive as possible. That could be asking a lot.