GigaOM did the math and figures that if a typical Macy’s (M) department store wanted to beam product information from its stock to customer smartphones it would cost between $230 and $5,000 for iBeacons. Plaster the stock with enough NFC tags to hit customers with contextual messages could cost as much as $100,000 (to tag one million boxes). The store would have to keep replacing those NFC tags as stock was sold, while the iBeacons would remain in place (or could be reprogramed and moved around) for two years.
Apple quietly introduced iBeacons with iOS7. There’s been no mention of it in the keynotes and it’s only made brief appearances as a line item on presentations. Despite the low-key introduction, it has the potential to turn into one of the killer features of iOS 7.
Combined with the Touch ID feature of the new iPhone 5S, iBeacons could be the one-two punch (connection plus security) that helps mobile payments take off. Even without the payment aspect, its ability to bombard customers — or track their actions within stores — has retailers excited.
By choosing to go with BLE instead of NFC, technology that’s effectively cross-platform (and thus has the potential to be available to a deeper pool of consumers), the company could swing some of the big mobile payment players into its camp.
ISIS, for example, relies on NFC terminals for its SmartTap solution, but requires Apple users to buy and install a “special accessory” for their iPhone to gain NFC support — clumsy and unlikely to convince many iPhone fans to adopt this wireless wallet solution.
The retail applications for BLE and iBeacons beyond payment will add pressure to the mobile payment vendors, and this could all end with Apple becoming the Kingmaker in forging a mobile payment standard.
Alternately, the company’s continued refusal to adopt NFC could mean another year of jostling for position with mobile payment continuing to fail to live up to its potential. If iBeacons take off, look for leading NFC chipmakers like NXP Semiconducters (NXPI) — up 235% in the past three years as NFC gained momentum — to suffer as a result.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.