Why Apple's 'indoor GPS' plan is brilliant

September 14, 2013 07:00 AM ETComputerworld - Nearly a year and a half ago, I predicted that Apple was hatching a "secret plan to kill the cash register." Now that plan has a name: It's called iBeacons.

At the end of this column, I'm going to tell you a stunning fact about iBeacons. But first, let's understand what Apple is hatching.

Apple cryptically introduced the iBeacons initiative at its developers conference in June, identifying the new technology as a feature of the iOS software developers kit (SDK).

In fact, iBeacons is a Bluetooth-based micro-locations system (think very accurate GPS that can be used indoors). But instead of being used by people to determine their own locations, it's used by retailers, museums and businesses of all kinds to find out exactly where people are, so they can automatically serve up highly relevant interactions to customers' phones.

Apple has not publicly revealed technical details about iBeacons, but it did tell developers what the technology is for and generally how it works. According to Apple, iBeacons is used for the following:

Region monitoring: To identify the general area the user is in, such as a stadium or a mall.

Ranging and micro-locations: To determine how far the user is from something, and specifically where the user is. The iBeacons technology may be able to detect ranges from two inches to 160 feet.

It works by monitoring signals from Bluetooth LE (BLE) beacons.

(Apple was the first maker of laptops and smartphone handsets to support BLE -- also known as Bluetooth Smart, Bluetooth Smart Ready and, formerly, Bluetooth 4.0 -- on all of its products, including tablets.) Just about any BLE device can support iBeacons; that includes any iOS device and BLE devices not made by Apple.

In a presentation to developers, Apple gave multiple examples of how iBeacons might work in the real world. For instance, the company said that the technology can determine exactly where a user is. If you walked into, say, Jay's Donut Shop, iBeacons would know for certain that you had walked into Jay's Donut shop, whereas other location apps might use GPS, Wi-Fi and cellular triangulation to produce a list of guesses about where you were. A check-in wouldn't even be required.

According to Apple, you could order donuts before you stepped foot into Jay's Donut Shop. Upon your arrival, your iPhone would display a QR code that a clerk could scan to verify that you're really you and not a would-be donut thief. Your donuts would already be bagged, and the receipt would be in your phone.

This scenario could be replicated for just about any brick-and-mortar retail store.

Apple showed this slide during the keynote of its Worldwide Developers Conference.

Also, iBeacons devices could be placed all over a store, and the system could send discount offers to iBeacons users as they entered particular departments. One or more iBeacons could be used as electronic cash registers.

There are other obvious scenarios that Apple didn't specify. They include the following:

Stores reaching out and giving coupons and advertising to passersby on the sidewalk or in cars. "E-Z Pass"-style building access -- doors would unlock and open as authorized users approach. A more secure version of this might require a fingerprint scan on the iPhone. Far-more-accurate Passbook location-based alerts. Tour-guide features that could give specific, detailed information on a phone or tablet within a single museum or across an entire city (with iBeacons placed at the specific landmarks and attractions). Theme park family tracking, E-Z Pass-type access to rides and quick, wireless concessions sales. Navigation aids for sight-impaired or physically disabled users inside buildings. Self-service checkout. A customer could scan the labels on clothing, process the transaction on the phone, then stroll out of the store with purchases in hand (the alarm would be de-activated for those items).

What Apple is doing with iBeacons seems to me to be an uncharacteristic move for the company: It's letting other companies get involved with its iBeacons technology.

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Federal judge upholds Apple's 30% take on in-app e-book sales

Computerworld - A federal judge on Thursday rejected government regulators' demand that Apple waive its 30% commission on all in-app e-book sales by third-party retailers, including Amazon, for two years.

Instead, Judge Denise Cote ruled that Apple could continue to bar e-book apps from its iOS App Store if the programs included links to external websites where customers could buy books or subscriptions.

Cote, who has presided over the e-book price-fixing case against Apple, issued her final injunction Thursday. Under that injunction, Apple is prohibited from disclosing deals it strikes with one e-book publisher to others -- a way to prevent it from again conspiring to set industry-wide prices -- and its behavior will be monitored for two years by a court-appointed antitrust compliance officer.

Her rejection of the Department of Justice's (DOJ) proposal that Apple be required to change its App Store policies, however, was a victory of sorts for Apple.

"Apple shall apply the same terms and conditions to the sale or distribution of an E-book App through Apple's App Store as Apple applies to all other apps sold or distributed through Apple's App Store," Cote ruled.

"This provision does not prevent Apple from introducing new categories of apps with different terms and conditions or from changing its App Store terms and conditions and applying them in a reasonable manner as long as Apple does not discriminate against E-book Apps," she wrote in the final injunction.

In early August, after Cote had found Apple guilty of violating antitrust laws, the DOJ and 33 state attorneys general had proposed a suite of remedies to ensure Apple could not become a repeat offender. Among them was a demand that e-book retailers be allowed to include links to external sales websites in their iPhone and iPad apps, a move that would have let the retailers sidestep Apple's 30% commission on all in-app revenue.

The DOJ and state attorneys general said that the commission exemption would "reset competition to the conditions that existed before the conspiracy" and "let consumers ...easily compare Apple's prices with those of its competitors."

Apple opposed the change, arguing last month that the government's App Store dictates had no connection to the e-book pricing conspiracy case, and that such interference in its business practice was "outrageous."

"Plaintiffs' proposed injunction would require Apple to carve out an exception to its blanket rule -- applicable to the more than 850,000 apps in the App Store -- that a commission applies to in-app sales of digital goods, and it would allow e-book retailers to make such sales commission-free," Apple's lawyers said in an August filing with the court.

Apple also made an implied threat, saying it was "under no duty to allow other retailers to offer apps on the iPad in the first place, much less on terms that subsidize their operations." That threat was effectively hollow, however, since an earlier order by Cote had blocked Apple from dumping e-book apps from the App Store.

Cote will decide on what damages Apple must pay in early 2014. Some e-book retailers, including Amazon, have told customers that they can expect between 73 cents and $3.06 for every eligible e-book purchased between April 1, 2010, and May 21, 2012, based on already-struck settlements with the book publishers.

Apple has said it will appeal Cote's July antitrust ruling.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

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