Apple Is Mysteriously Silent About Its Mass Surveillance System For Shoppers

Apple didn't mention iBeacon, its location-detection device for shoppers who carry mobile phones, at the keynote of its WWDC software developers' conference yesterday. It's an omission that has some people scratching their heads, because retailers and e-commerce companies believe it's one of Apple's biggest new products.

iBeacons are tiny devices that can be installed anywhere - store shelves or shop windows, for instance - and use Bluetooth to detect when you walk by with an iPhone in your pocket. Once they sense you, iBeacons can send you offers or updates, assuming you have the system turned on. Arguably, iBeacon is Apple's mass surveillance system for shoppers. Apple itself isn't doing the surveillance. That will be done by the companies that install them.

We asked Apple for comment but didn't hear back. Apple says privacy isn't an issue because iPhone users' data is shielded from the iBeacons. Each iBeacon sends you data, it doesn't gather it, the Wall Street Journal says:

Privacy remains a concern. Apple says tracking fears aren't well-grounded because the signals are one-way and the beacons don't know anything about the user. But apps that use iBeacon might have personal data, to which they can add location details. "There are some privacy holes in there - people might not notice that they are giving up some information if it's not handled correctly," said Michael Healander, general manager for GISi Indoors, a company that specializes in geolocation technologies.

So while Apple might not collect iBeacon data, iBeacons will generate some data for companies that utilize them or make apps that get pinged by them.

Prior to WWDC, everyone expected Apple to deliver some sort of update on how iBeacon was being used or integrated into iOS 8, Apple's mobile operating system for iPhone and iPad. iBeacon was briefly namechecked at last year's WWDC. People in the e-commerce business expect iBeacon to be huge, the Wall Street Journal notes, and already tens of thousands of companies are developing apps that use iBeacon:

Eventually, beacons will be "everywhere," said Steve Cheney, senior vice president for Estimote Inc., a startup based in Krakow, Poland, that creates hardware, services and software for iBeacon.

Nearly 20,000 developers are paying to use Estimote's software kits. The company worked with Virgin Atlantic on its Heathrow test. A passenger who downloads a boarding pass to Apple's Passbook can receive alerts such as offers to change currency with Virgin partner MoneyCorp or directions to the airline's Clubhouse.

Because you can put iBeacons anywhere, and use them for anything, insiders believe the system will become almost ubiquitous, TechRepublic says:

The iBeacon ecosystem also has the potential to change other industries. Special events -- concerts, sports games, and festivals, can use it to more seamlessly involve fans in those experiences. For instance, at SXSW this year, iBeacon was used to deliver badges and help fans communicate about the individual concerts. It could enable the smart home as well. Since it's already in industrial LED lights, you can bet it will be built into our home lighting, appliances, and electronics at some point, allowing people to more affordably achieve smart home functionality. In the classroom, iBeacon allows teachers to take attendance, monitor who is in the classroom, and communicate with students and parents.

You know how difficult it can be to navigate certain types of events or locations without a phone? Just try going to a large, multi-stage, multi-day music festival and keeping track of your friends without a phone, for instance. If iBeacon becomes widely accepted, you can assume that it will become more difficult to navigate similar situations unless you have iBeacon switched on. Stores and businesses will incentivize you to turn on the system, and in return they'll get valuable data - such as how many people are passing beacons in various areas of a store - as the system detects your signal.

Here's a simple example from Macrumors of how it might work at Starbucks:

For example, MacRumors readers have seen relevant app icons pop up while at or near brick and mortar locations like Starbucks and the Apple Store. While at a Starbucks, for example, the Starbucks app icon is displayed in the lower left corner of the iPhone's lock screen, which allows the Starbucks app to be easily accessed.

Alerts for nearby stores may appear on your lock screen as a result.

Right now, the technology is in its infancy and still relatively expensive to implement. Plus, most people keep the Bluetooth function on their phones switched off. That may change once iBeacons become so cheap that everyone can have one:

Rumors are flying that there will soon be a $1 beacon, allowing businesses of any size to use this technology and allowing companies to have multiple touch points with customers. This will change the entire product supply chain with deep analytics that can track inventory and customer needs.