Who Will Win at Indoor Location?

Janice Partyka

Where are bets on new technology being placed? Prominent venture capital (VC) firms are investing in companies with indoor location solutions. But with more than 50 companies to choose from and at least ten unique technologies, it is hard to judge who will make it into the winner’s circle. There is no early leader to put money on, and unlike other location-based markets like mapping, I expect this market to support many competitors and not be dominated by a few. The vertical markets that are ripe for indoor location have different needs for accuracy, cost and speed. Promising applications include retail, advertising, manufacturing, asset tracking, gaming, intelligence and public safety, but who knows what other applications will emerge. GPS has infiltrated everyday life in ways unimagined at its start.

With no obvious front-runner technology, many companies hedge their bets and offer multiple technology solutions. With infrastructure already installed throughout the great indoors, the easiest solution may appear to be Wi-Fi triangulation. While the cost may be attractive, the accuracy is not precise enough for many apps. Other solutions include Wi-Fi fingerprinting, Bluetooth, sensors and beacons.

Some companies are offering technologies outside of the mainstream. ByteLight provides a solution based on LED lights mounted in the ceiling that generate fast pulses that can’t be seen by people. A smartphone can detect the pulses and triangulate position by identifying different lights by pulse pattern. Indoor Atlas and Indoo.rs use sensors to detect Earth’s natural magnetic fields for positioning. Camera technology is being used by WhereLab and Omiimii. Object recognition software determines location.

The accuracy requirements of applications will drive the choice of technologies. Low accuracy is more than 11 meters, and medium accuracy is six to ten meters. High accuracy is one to five meters. High-accuracy solutions are generally more expensive and require more infrastructure.

Apple iBeacon Changes to Opt-Out

Anything that Apple does garners attention, including iBeacon for indoor location, which uses low-energy Bluetooth to communicate to phones and computers. Apple has some showcases, including a few Eagle and Safeway grocery stores using the iBeacon to send marketing messages to customers. The Peeble smartwatch added iBeacon support and reportedly can zero in on a lost phone. iBeacon technology at some of the Virgin Atlantic gates can trigger an app to automatically display a boarding pass as a traveler approaches. BeHere automates classroom attendance.

I often write about privacy issues, and so I wonder, where are the techno-privacy advocates challenging Apple on iBeacon? You would think that there would be a tangle of permissions required of users, including turning on the beacon and giving an app permission to locate the user and for receiving notifications. Apparently, Apple thought the permissions were unwieldy. Apple users had to opt-in to turn on iBeacon, but in March with the new iOS release, the default changed to opt-out.

Apple users may be unaware that an app using iBeacon doesn’t need to be open to interact with the phone. If the Safeway app is installed, the user will receive messages from the store, even when the app isn’t running and phone screen is locked. Even though iBeacons don’t track users or collect data from them, I find this functionality to be unsettling.

Advertising in Minority Report was very personal.

Stores are having trouble competing with online shopping and are looking for ways to interact with shoppers when they come through the door. That interaction might be loyalty points, greetings or personalized special offers. Only three percent of retailers currently have the ability to identify customers coming through their doors, according to a survey of top retailers by Boston Retail Partners. ABI Research predicts beacons will be installed at 30,000 locations worldwide by year’s end. If beacons alone can generate such widespread usage so quickly, it is easy to see why indoor positioning technology companies have been a magnet for VCs.

Do you remember the scene in the movie Minority Report when Tom Cruise enters a clothing store? As Cruise passes by advertisements, they address him by name. Indoor location can get creepy.