Technology enthusiasts, as well as consumers, are wondering why Apple, Inc. (NASDAQ: AAPL) ignored near-field communication (NFC) in its devices when NFC was a key feature in all premium mobile devices.
However, few could have known that Apple is betting on another technology, which has the potential to trump NFC. We are talking about Bluetooth Low Energy (BLE).
NFC is an inexpensive passive system for payer identification. It is popular in Europe but not in the US. It's well-suited to the task of fast purchases. Credit cards and key fobs have embedded NFC chips encoded with the user's payment data. While convenient for finalizing the purchase, the 10cm range limits usefulness and increases costs.
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This is where BLE steps in. BLE is active but low power. The effective range of 20 metre (clear field with no obstacles is 70 metre) means that a retail store could cover its entire showroom with a $99 three-unit bundle. Using the smartphone enables more sophisticated interactions than just user authentication and purchase.
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Skeptics may fear that BLE purchases could have risks. How will store personnel know that the item was paid for? The 70-meter range would enable more hacking of the cash register system.
UBS analyst Steven Milunovich said though smartphone thefts would have more dire implications, these issues are solvable and that eventually BLE will be used for purchases.
Meanwhile, micro mapping with BLE is a potential killer app. Retailers prefer transactions closer to the cash registers, and that's exactly the trend that's happening throughout technologies. Mobile payment systems and checking out by yourself and all these things that are about to happen require maps for all this stuff.
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This is where Ap! ple's recent acquisition makes sense. In case you don't know, Apple recently acquired a company called WiFiSLAM for about $20 million in March. WiFiSLAM, an indoor GPS startup, enables a smartphone to pinpoint its location in realtime up to 2.5 meters in accuracy.
The two-year-old startup has developed ways for mobile apps to detect a phone user's location in a building using Wi-Fi signals. The developers can use this technology for indoor mapping and new types of retail and social networking apps.
Tech forecaster Mark Anderson said, "The idea of micro mapping is so obvious and so large financially in terms of its benefit that it's almost like we should forget the rest of the killer apps. When people get excited about advertising and local-based advertising, they ought to be very, very excited about the idea of micro maps."
WiFiSLAM could be helpful in creating micro mapping as it combines standard WiFi with algorithms for Simultaneous Localization and Mapping to utilize both WiFi triangulation and smartphone sensors to map a path accurately. The newest smartphones have a gyroscope, magnetometer, and accelerometer on board that WiFiSLAM exploits.
The multi-trillion dollar local commerce business is due for some new technology earthquakes, Milunovich noted.
Market research firm ABI Research estimates the indoor location services market as $4 billion in 2018. Another firm, MarketsandMarkets, is looking for $2.6 billion growing at a 42 percent CAGR from 2013-18.
It appears that Apple has chosen Bluetooth Low Energy (BLE) over NFC as its communications technology given a further range of 70 meters and has the potential to exploit the massive location services market more effectively. It also underscores Apple's strategy of creating something new and not going along with the tide.
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