When iPad and iPhone owners updated their systems to iOS 7, they also transformed their devices into a new type of communication channel, whether they realized it or not. Specifically, the latest operating system update installed iBeacon software onto their mobile devices.

The iBeacon software works as a location service, such that transmitters can send messages to any user with an iPhone or iPad that has been updated to iOS 7. Apple soon announced that it already had installed transmitters into all of its U.S. stores. When Apple fans visit the stores, the iBeacon location service will push notifications to them based on their specific location. A shopper who pauses by the updated MacBook Air might receive a message on her phone about its battery life or compatibility with her phone. Another consumer who breezes past the phones could receive a reminder that he is eligible for an upgrade.

This application is notable; it indicates that Apple has jumped ahead of its competitors in devising and implementing hyper-targeted, micro-location–based marketing. For its retail stores, the software reveals not just whether a potential customer is in the same town or near the parking lot but also whether a shopper is literally standing near the accessory display.

This rollout in the Apple stores appear to be just the tip of the iceberg. Recent model iPhones and iPads can not only receive messages using the iBeacon software but also be easily configured to serve as a transmitter of iBeacon messages. That means that virtually every retailer that invests in an iPad can use the software in a way similar to Apple’s use: pushing notifications to shoppers who are already in the store, locating them precisely, and learning exactly how they move through the store. One estimate suggests that there are thus approximately 200 million potential iBeacon transmitters already in circulation—and that’s before the functionality has even gained widespread acclaim.

For Apple, the competitive advantage appears nearly insurmountable, because when users updated to iOS 7, they also opted in to the iBeacon application, agreeing to accept the micro-location–based push notifications. Other stores will need to get consumers to agree to receive similar messages. For big retailers such as Walmart, it might not be hard; they can simply include the software in their regular apps that consumers already may have downloaded.

Furthermore, Apple has essentially blazed the trail for this latest innovation for retail. Combining its dominance in the tablet market, popularity in the mobile phone market, and first-mover advantages in the location service market, it appears that the iBeacon is set to become the standard.

 

Matthew Panzarino, “The Open Secret of iBeacon: Apple Could Have 250M Potential Units in the Wild by 2014,” TechCrunch, December 7, 2013, http://techcrunch.com/2013/12/07/the-open-secret-of-ibeacon-apple-could-have-250m-units-in-the-wild-by-2014/; Zach Miners, “Apple Tracks Shoppers in its Stores with Nationwide iBeacon Rollout,” Infoworld, December 9, 2013, http://www.infoworld.com/d/mobile-technology/apple-tracks-shoppers-in-its-stores-nationwide-ibeacon-rollout-232322