He draws an important conclusion: "With iBeacon and Bluetooth LE, Apple may have created a far more palatable and more passive way of paying digitally, especially since it relies on a payment method iOS customers already know."
What is iBeacon?
IBeacon is a new technology that extends Location Services in iOS. Your iOS device can alert apps when you approach or leave a location with an iBeacon. In addition to monitoring location, an app can estimate your proximity to an iBeacon (for example, a display or checkout counter in a retail store).
IBeacon was introduced formally when Apple released iOS 7 last fall. But it's based on the Bluetooth Low Energy (BLE) radio that Apple first introduced with the iPhone 4S, and then added to the iPad, iPad mini, and iPod Touch. The radio has the standard BLE protocol stack. On top of that, Apple created what it calls the Core Bluetooth framework, which is a set of classes used by iOS and OS X apps to communicate with other BLE devices. With the framework, an iOS app can discover, explore, and interact with "peripheral" devices, such as a digital thermostat; since iOS 6, the iOS device can act itself as a peripheral, sharing data with other devices, including those running OS X and iOS.
But an iBeacon is a special class of BLE devices. "A beacon is a dumb broadcasting device, with a fairly high data rate, mounted on a wall," says Aaron Mittman, CEO of SonicNotify, a startup that offers both beacons themselves and a backend content management system to serve coupons, promotions, messages and the like to iOS, and Android, phone users. An iBeacon communicates only with the iPhone there's no backend link to a Wi-Fi network or the Internet — and only in a very limited way.
SonicNotify offers a handful of beacon models in different sizes, shapes, and colors. Some can plug into a wall outlet; others use quarter-sized nickel cadmium batteries or standard AA or even C size batteries.
The beacons broadcast their signal over a configured area, typically up to about 50 meters. When the user walks within range, the iPhone "hears" the broadcast, and in effect, asks "what is this about?" Often, it's an invitation to download a retailer's app and get information about special offers. If the user accepts, he is agreeing to share his location information: the app uses the iPhone's Wi-Fi or cellular radios to connect to the SonicNotify server, share its location information, download and installs the app, and receives notifications.
As Mittman says, the iBeacon is simply a "trigger," or a kind of digital tripwire, that alerts the phone and its user that some content specific to the store or venue where he is standing is available.
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