Are Eddystone APIs a Huge Threat to Indoor Location Start-Ups?

July 27, 2015, 9:41 a.m.
Patrick Connolly, Principal Analyst

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With the release of Google’s new Nearby and Proximity APIs in conjunction with the Eddystone BLE Beacon standard, many have questioned the viability of start-ups and developers looking to create a business model around proximity apps and a services such as navigation, analytics and advertising.  While the market has certainly become much more democratized and Google now becomes a major provider of these services in itself, this is neither a surprise nor the end for the many start-ups that have had initial success in this space.  

For those who are focused on retail, public venues and mobile advertising, the major negative for Google is that from the very outset of this market, retailers have repeatedly said they are reluctant to work with companies like Google. The ability to retain control of data, the customer relationship and the types of advertising they receive in-store is vital and this will create opportunities. Google, Facebook, etc. were always going to win the SME long tail but there are still big retailers that will chose a closed system using their own technology providers. 

In the analytics space, an interesting way to beat Google, etc. is hybridization, combining beacons with Wi-Fi, sensor fusion, etc. to offer better accuracy and insight. I have been advocating ultrasound for a number of years but it looks like Google may have beaten the majority to the punch here. However that is primarily an advertising focused technology and there are many more out there to work with. Clearly Google will take advantage of handset-based technologies like sensor fusion as and when the market is ready, so start-ups must also look to work with hardware based solutions, where Google is less likely to have a play e.g. LED, Wi-Fi, camera analytics, facial recognition and smallcells. One thing Eddystone appears to lack is any advances in terms of accuracy, range, etc, despite many OEMs working on solutions, such as Sensoro’s dual antenna beacon. By leveraging these technologies, start-ups can outpace standards-based approaches, particularly in verticals where increased accuracy and range is required such as airports, convention centers, hospitals, etc. these are all markets where navigation is important and some of the best solutions out there at the moment are from companies like SenionLab and Nextome, combining BLE and sensor fusion.  

Google does appear to have one major long term advantage over start-ups, as it can support “always-on” tracking throughout the day (as part of quantified self or ambient intelligence/PA services), and so build up a far better understanding of exactly who the customer is. This is where Google wins on analytics (assuming there are no privacy issues). But there are alternatives and we are starting to see retail analytics companies work with carriers and third parties like Pitney Bowes to gain access to this type of information, even if it is just at an aggregated, anonymous level. 

Where Start-ups can win?

Looking at the wider market, developers/start-ups should start to look beyond retail. Beacons are expected to penetrate a myriad of other markets in far greater volumes, such as IoT, connected home, smart cities, enterprise/industrial, personal asset tracking, etc. Start-ups should look to verticalize and develop services that are unique to these applications - become the go-to company for industrial asset tracking for example. I genuinely believe that there are far greater revenue opportunities in many of these verticals providing network maintenance and services that bring efficiencies to businesses, than there is in retail, where much of the long term revenue will indeed come from advertising.