iBeacon: How much privacy would you give up for a coupon?

Just in time for the holiday shopping season: a new way for retailers to track and target customers.

Late last week,Apple enableditsiBeacontechnology in 254 of its U.S. retail stores.Pick your buzzword: location-aware services, context-aware computing, Internet of Things. That's where this is headed.

Essentially, aniBeaconis a small wireless transmitter that sends out a unique radio signal.

"Imagine you're a ship. iBeacons are lighthouses," explains Jeffrey Dungen, a Montreal-based engineer and entrepreneur who has worked with the technology.

"TheiBeaconsare just sending out a radio beam - much like the light beam of a lighthouse - which is uniquely identifiable."

Compatiblesmartphonescan detect these signalsand use them to better understand what's nearby. When paired with a store's ownsmartphoneapp, very precise targeting becomes possible.

"The location accuracy is much more on a human scale," saysDungen. "It's not necessarily, 'I'm in a building.' It can be'I'm in a building in a specific room' or 'I'm on a specific floor.' It's much more precise than justGPSalone indoors."

Many uses

Despite the name,iBeaconsare not Apple-exclusive. The underlying technology relies on the latest flavour of Bluetooth. So long as a device supports Bluetooth 4.0 (as manyiOSand Android devices do), it can theoretically supportiBeacons.

What's more, a number of third-party companies build and sell theiBeaconsthemselves. Retail environments are a natural fit, and that's where a lot of the focus has been.

However, it's not difficult to imagine other applications.

For instance, museums. You walk by a display, and aniBeaconnotifies yoursmartphonethat there's additional information about whatever's in front of you.

Or publishing. A UK company called Exact Editions has usediBeaconsto give away free access to digital soccer magazines. The catch? They're only free when yoursmartphoneis within range of aniBeaconthat happens to be at a bar. Once you're out of range, the free access disappears.

Major League Baseball has said it plans to useiBeaconsin its stadiums, alongside theMLB's"At the Ballpark" app. Walk into a stadium, and the app welcomes you. Walk past a concession stand, and receive a coupon. You get the idea.

Consumer appeal

The advantages for retailers are pretty clear. But as a consumer, why would I opt into this?

"It's very simple," says JeffreyDungen. "You, as a customer, will only opt in if you know you are getting a better experience. You might receive coupons, or it could be faster checkout. But there has to be a better customer experience. Otherwise, people will not use it."

Indeed, many of us are suckers for coupons. Often, we're willing to be tracked and targeted, if it means saving a few bucks.

While much has been made of the potentially creepy or annoying uses ofiBeacon, it's important to note thatiBeaconsthemselves aren't tracking anybody. Again, they're like lighthouses, simply broadcasting a signal.

And because mostiBeaconimplementations rely on a companionsmartphoneapp that must be granted permission to use location services, there's an "opt-in" of sorts.

However,Dungensays that integration opens up potential for tracking. If you have Bluetooth turned on, and you've opted into aniBeacon-enabledapp, nearbyiBeaconscan trigger yoursmartphoneto go online.

"Your phone has to be connected to the internet in order for the content from theiBeaconto show up on your phone."

That's where the potential to be tracked comes in. If a nearbyiBeacontriggers the download of a coupon, suddenly, there's a link between the coupon, your phone, and exactly where you were standing the store when you triggered it all.

For the privacy-conscious, that level of precise targeting and tracking may be troubling.

But, on the upside coupons.