One of the hot topics in mobile technology for the past two years has been indoor location technology, which involves methods of making GPS-like location-based systems work indoors. For years there have been start-up companies bringing indoor location technologies to market, at malls or stores, at casinos or hospitals, and other indoor sites. But in the past few months big developments in indoor location have started to come from major companies, not only start-ups.
The latest in a series of reports on indoor location technologies, which previously reported intensive research by major companies, now reports that these major companies are starting to bring their research to market. This should mean an even faster pace of developments in indoor location technologies in 2014.
In recent months, Apple (NASDAQ:AAPL) has gotten a lot of attention for their iBeacon system, in which Bluetooth-based devices, dubbed iBeacons, placed in key places in stores and malls, can cause iPhones to "wake up" and launch applications when entering or leaving the vicinity. This enables, for example, your favorite coffee shop to give you a mobile coupon for a latte when you walk by a shop at the time you usually need a boost, or a fast food restaurant to know when you enter the shop so that your order is already ready for pick-up.
While Apple built the infrastructure for iPhones and iPads to interact with iBeacons, they don't make or sell the iBeacons themselves. They left this primarily to small companies such as Estimote, ShopKick, Roximity and others. But, in recent months, Bluetooth proximity beacons have been brought to market by major companies as well, including Gimbal from Qualcomm (NASDAQ:QCOM), ShopOne from Cambridge Silicon Radio (NYSE:CSR), SensorTag from Texas Instruments (NYSE:TXN) and others. These companies have added their own innovations, such as encryption, and are engaging their corporate strength in bringing their beacons to market.
PayPal, the mobile payments subsidiary of EBay (NASDAQ:EBAY), is also entering the proximity beacons area. As expected, they are integrating proximity beacons into in-store mobile payment, enabling stores to detect when a customer is ready to pick up an order and check out, and accept payment automatically via PayPal.
All of this attention from major corporations means that proximity services and applications, both for iPhones and for other smartphones, are going to be popping up soon, not only in small stores but in major chains, and not only for invoking applications but for accepting payments and offering a broader range of services.
Qualcomm's activity in indoor location is far from limited to proximity beacons. They recently brought to market their new chip, designed for smartphones and other mobile devices, which will enable these devices to track their locations indoors completely in hardware, without requiring a lot of processing to be done by the device itself. It does this using a wide variety of techniques, including using nearby Wi-Fi access points, sensing the movement of the device with onboard sensors, and more. This IZAT technology, if incorporated into smartphones, will enable these smartphones to efficiently track their locations when they move indoors.
Qualcomm isn't the only chip company bringing indoor location technology to hardware. CSR, Broadcom (BRCM) and others are also entering the fray with their own location-tracking chips. All of this activity by chip-makers is very significant, because indoor location positioning takes a lot of resources from smartphone CPUs, and chips that perform indoor positioning will offload this work from the CPU.
Apple's activity in indoor location is also not limited to iBeacons. They acquired a start-up company about 9 months ago that developed indoor location technology, and recently-published patent filings show significant research in proximity detection, location estimation on a small scale and a large scale, and more. iBeacons may well be only their opening salvo in their entry into the indoor location arena.
Google (NASDAQ:GOOG), of course, is likely to defend its first-mover's advantage in indoor location. Google enabled Google Maps on Android phones to work indoors in November, 2011, the first mobile mapping and navigation application to do so. But their location positions are still not accurate enough for many users. They're still actively researching the area, and will likely defend their lead with updating offerings soon.
Many other mobile companies, including Microsoft, Samsung, Motorola, Sony Mobile, Research in Motion and others, have done a lot of research in the area of indoor location, but most of this research has yet to reach market. But now that the chip companies have opened the floodgates, major companies are more likely to productize indoor location research.
With all these developments from major companies, 2014 is poised to be the year that indoor location technology enters the mainstream. The open question, of course, is whether success in the market will go to chip companies, mobile companies, cellphone makers, or other players in the space.
Of course, we've only touched here on the recent developments in the area from major mobile companies. There are also over a hundred start-up companies pushing the envelope of indoor location technology at the same time, with new technologies like UWB-based positioning, network-centric positioning, improved positioning accuracy, user movement analytics and much more.
As the major companies catapult indoor location technology to the market, many start-up companies will either sell their products, make alliances with major companies, or be acquired by major companies.
All in all, 2014 is poised to be the year that indoor location technology moves from start-ups to major companies. Which companies will reap the rewards?
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.