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Apple Buys Indoor Location Company, What’s It Up To?

Apple Buys Indoor Location Company, What’s It Up To?

This weekend the Wall Street Journal reported that Apple had paid roughly $20 million for a company called WifiSLAM. The company was an early stage startup that had raised roughly $1 million in angel investment. It appears to have had some ambitious plans, according to a company description on AngelList:

We are building the next generation of location-based mobile apps that, for the first time, engage with users at the scale that personal interaction actually takes place. Applications range from step-by-step indoor navigation, to product-level retail customer engagement, to proximity-based social networking.

Given the above the acquisition probably isn’t entirely about indoor navigation and competing with Google Maps, as was immediately assumed by many people. WiFiSlam’s original plan was to market not to consumers but to developers who, in turn, could use indoor location to deliver services and content to their customers.

Apple may see indoor location as a future part of the iOS platform.

WiFiSlam appears to have developed a somewhat novel approach and methodology using WiFi to locate people in interior spaces. However the deal may also have partly been to acquire the team involved, which included some former Google engineers.

In addition to Google and Microsoft, there are literally dozens of companies working on indoor location — so many in fact that there’s now a quasi trade group and standards body: the In-Location Alliance spearheaded by Nokia. The primary challenge facing most of the indoor positioning/location/navigation companies to date has been less about technology and more about how to make money.

Early entrants envisioned an ad supported consumer-facing model, in which deals and promotions would help lead consumers through shopping malls and into stores. These apps and companies couldn’t build big enough audiences to interest advertisers or make a go of it. So, companies such as Point Inside and Aisle411 pivoted to provide B2B services. They now aim to enhance retailers’ apps with indoor location.

Meridian is another company is the space that offers an SDK for developers and retailers. Its technology and indoor navigation capabilities are already on display in the Macy’s app. Another company, Wifarer, licenses its technology to airports and museums.

Licensing indoor location to those with existing consumer relationships is one viable model. There’s also considerable money available for in-store merchandising, which might become another source of revenue for developers and retailers employing these technologies. For example Phillips could promote its new LED lights in the Home Depot app when I search for the location of lighting or fluorescent bulbs in the store (this is a hypothetical example).

Another company called WirelessWERX presents another model: business intelligence and analytics. The company is offering retailers and grocery chains “Google analytics for the real world”: data about how consumers move through stores, what departments get the most foot traffic, how much time they spend there, and so on.

There are lots of compelling uses for this type of data (e.g., staffing decisions). There are also what I might loosely call “urban planning” implications for this aspect of the technology.

The simple models that initially saw consumers being shown coupons and offers through proprietary apps have largely faded. However a range of new, viable and intriguing use cases have emerged where retailers, venue owners and others license indoor positioning capabilities to deliver better in-venue service and experiences as well as venue-based news and promotions. But perhaps even more compelling may be the pure enterprise use cases where venue owners gain never-before-available data about customer behavior.

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