Apple's First Test Case for iBeacon's Micro-Location is Shopping

It's becoming clear that the future of the internet will be not on computers, but out in the world. Apple made a step towards that future on Friday with iBeacon, a location awareness app for iPhone that embeds virtual offers and information in various locations inside the Apple Store.

iBeacon is an indoor micro-location positioning system that works with low energy Bluetooth 4.0 proximity sensing to track an iOS 7 device and send push notifications to that device when various sensors notice it's nearby. iBeacon works differently than GPS, using proximity-based sensors to track a device's location indoors, which is something, for example, that GPS can't do.

Apple launched the application and system on Friday, giving Apple Store visitors an opportunity to receive contextual messages and possibly deals, depending on where they happen to be inside the store.

For customers to try out the system, they have to download the Apple Store app - if it's not already on the device - and give that app the various permissions it needs, including the ability to access location data and to send push notifications. The iBeacon technology only works on iOS 7, so you need at least an iPhone 4S, iPad 3, iPad mini, iPod touch 5^th generation, or newer.

For Apple to make iBeacon work, there's a lot more preparation required. Apple installed iBeacon technology in all 254 U.S. Apple Stores, embedding Bluetooth sensors in various locations throughout each store. For example, Apple installed about 20 iBeacon transmitters inside the Fifth Avenue New York City Apple Store. Making the job easier, iPhones and iPads on display can act as iBeacons as well.

This first test case of the iBeacon system for Apple isn't working perfectly so far, according to Apple Insider, which took the system for a hands-on test drive. "Upon entering an Apple Store, we found that the official app knew immediately that we were present at that location, even before we connected to the store's free Wi-Fi," writes Apple Insider's staff. "A splash screen in the app provided quick links to EasyPay, help, support, a gift guide and more."

After that, things got less smooth. Only one push notification came to the iPhone throughout the store, saying, "Shopping for accessories? Read product reviews and make your purchase right from your iPhone." Shopping with the iPhone isn't new for the Apple Store - it's something that has worked with the Apple Store app connected to the store's WiFi for a while.

The possibilities for iBeacon are much more extensive, though. For customers, it can provide useful information on products (like reviews, ratings, and accessories) but it could also possibly give some shoppers personal, lightning, limited-time discounts on a particular product, or give them directions to an accessory or product in a bundled deal within the same store.

For retailers - and, of course, this should not come as a surprise - the possibilities for marketing, advertising, and profiling customers are huge. First, one could imagine the ability to push information and deals to the customer will result in more impulse buys. But if iBeacon becomes common, and cusomers allow apps to track their devices, retailers will find something even more useful: a plethora of detailed information about shopper's habits, walking patterns, and other behavior, which you can guarantee marketing and consumer psychologists will use in order to pick apart our unconscious minds even more than they already do.

Of course, iBeacon technology also has possibilities to enhance museums, art galleries, nature trails, and other places that could benefit from location-based information augmentation. But I would expect iBeacon to first become more common in places where it can help people make more money.