The arrival of Apple’s iBeacon* and Paypal’s BLE Beacon has stolen the headlines but there are a host of companies that have been active in this space for some time. As well as long term start-ups like WirelessWerx, ABI Research observed about a year ago a clear shift in Wi-Fi based companies towards Bluetooth on the back of Apple’s decision not to open Wi-Fi APIs as well as growing speculation that it would in fact back BLE. Companies like Estimote, Wifarer, Insiteo and Walkbase were some of the first to make the jump, but now we are seeing big names like Qualcomm, Shopkick and ShopperTrak also getting in on this, (again, as forecast by ABI Research) and they will by no means be the last. We are fast approaching a stage where if you don’t have BLE support, you better have a very good reason for it, hence a number of announcements ahead of CES and NRF (which ABI will be attending).
But it’s not just the big guys that are going to address this space. The beauty of BLE is that we will see a democratization of the technology. Today, most location technologies (Wi-Fi, etc) are offered directly to retailers, primarily for analytics/advertising purposes, as part of an overall solution. Typically, these deployments are a trade-off between cost and accuracy, with little competition to force down prices. Companies like Estimote provide start-ups, retailers and developers with low cost equipment, SDKs and a services platform enabling the technology to proliferate beyond the major brands and also beyond the classic use cases.
So in theory, every retail application developer can now become an indoor location technology provider. Estimote already has 60,000 developer kits shipped (mine is in the post) with 20,000 developers actively working on a application/deployment in a physical store. What is also interesting is that there is allready a pent up demand for these beacons. ABI Research expects that Qualcomm has a host of retailers that have been trialing its technology (as part of its overall retail offering) and no doubt they are ready to deploy. This democratizing and availability of low cost BLE will enable the market to evolve more rapidly, developing vertical specific and niche market use cases, as well as the core benefit of analytics.
But Bluetooth is not the complete answer to the indoor location problem. It has major issues around coverage and device reach (typically 20-25% of handset have Bluetooth set to active, before factoring in that BLE is not commonplace yet). This will make it very unsuitable for high volume advertising. There are also issues around security that might play a part in using it for POS. The reality is there is no one technology to rule them all and the only long term solution is hybridization.
However, ABI Research has preached the importance of Bluetooth as a gateway technology for two years. It is open season in the retail landgrab, with little or no technology deployed and a huge pent up demand. Bluetooth is perfect because it is low cost, is cross platform and can start delivering immediately, particularly for analytics. It will be very easy for anyone to become a start-up in this space, where there is room for lots of local and regional winners, who will often be the guy that is there first rather than best.
ABI Research expects to see a host of small local/regional players achieving initial success with this technology. However, to paraphrase a great thinker, “In technology markets where every blockhead has BLE, BLE becomes a thing for blockheads." The more difficult part will be how to layer other technologies on top to fill in the gaps and offer a complete solution. This is how companies will differentiate on Bluetooth. Already next generation BLE is available through Quppa (spun out of Nokia’s HAIP development), offering sub meter accuracies across 100 square meter ranges. Companies that rest on their laurels will soon be phased out.
*Please note, Apple did not invent BLE location, beacons or indoor location!!
