The complete

Beacon industry
report:

Current Technology
and Recent History
Contents

3 Summary

4 l. Internet of Things is transforming industry

Industry 4.0

6 II. Medium-range Wireless Communication

Comparing Wireless Technologies

The Introduction of Bluetooth
The introduction to Beacons

10 III. Industry 4.0 Means Beacons

Industry Development
Fragmentation
Currnet Market

14 IV. Beaconized Industry

About Kontakt.io

Summary
Beacons
Beacons are a central building block in
the Internet of Things revolution, and they
create value by relating precise geographical
information to other devices.
Bluetooth technology
Bluetooth technology has transformed in
recent years, enabling the maturation and
growth of the beacon industry. As the IoT
standard, Bluetooth is already replacing legacy
technologies and strengthening beacon
solutions.
3
Beacon Industry
The current beacon industry is adapting
in order to accommodate more complex
applications. It is trending towards a
fragmented market where beacon firms
specialize in specific areas.
Beacon application
Initial beacon applications were mainly limited
to marketing and retail. However, valuable
applications can be found in other industries
including manufacturing, logistics, commercial
real estate, and healthcare.
 4

I. The Internet of Things

is transforming industry
By 2020, the world will see more than 50 billion things connected
to the internet. The Internet of Things (IoT) describes the
network of physical objects embedded with sensors that enable
data to be collected and shared. Smartphones, wearables, and
many of their applications are part of the IoT. Future solutions will
connect different Things to create more automated processes.

Until recently, digital communication has focused on connecting

devices and people who were far apart. Now, the focus is turning
to devices in the last 100 meters. Ordinary tools that are used
everyday are now being connected at rapid speed in the home
and workplace. Due to the number of such devices, this will lead
to a boom of connectivity.

The next task will be simplifying the way those billions of devices
communicate with each other.
 5

Industry 4.0 Smart devices/beacons count

Industry 4.0 is one of the biggest beacon buzzwords, but it also

represents a very real shift in modern business. Industry 4.0
marks the introduction of the “smart factory” and represents the
first steps toward total automation.

This shift is driven by the increase in data and connectivity, new

analytics capabilities, emerging modes of human-machine
interaction, and improved transfer of digital instructions (for
applications like 3D printing). However, the introduction of wide-
area connected networks, like beacon infrastructures, is vital to
bridging the physical and digital worlds.

Enterprise IoT, Industry 4.0, and Industrial IoT will transform

50 bilion devices
10 bilion devices
businesses in the very near future. While beacons’ role in retail
and marketing is still being defined, large institutions like those
working in manufacturing, retail, and even healthcare, will find
beacon infrastructures offer the greatest transparency yet,
empowering decision makers and optimizing daily operations.

400 milion
beacons

2013 2015 2016 2020

 6

II. Medium-range
Wireless Communication
Reliable hardware and infrastructure are fundamental to a con-
nected ecosystem. There are many options but, in order to move
forward, a standard for communication must be chosen. A sys-
tem that is accessible to customers, managers, and movers, busi-
nesses large and small, must be put in place.

Global Positioning Systems (GPS) have dramatically changed

the possibilities for tracking assets moving around the globe,
and NFC, RFID, and even barcodes are still being used for close-
range tracking. However, these tools do not offer all the capabili-
ties required for future technologies.

Technologies for medium range (-100 m) communication have

recently grown more desirable and more affordable. These are a
major component of enterprise IoT, as they connect assets that
are neither very close nor very far.

"
Below are some of the most important of those technologies.

“Two companies approach me every month with new IoT

products based on BLE. Zigbee is dead -BLE is everywhere.”
Dimitar Vasilev, founder and CTO at Cisco's innovation
platform openBerlin
 7

Comparing Wireless Technologies

WiFi Zigbee Bluetooth UWB

TM

WiFi is used mainly for computer-
to-computer communication and
wireless internet access. It has a normal
range up to 100 meters. Under ideal
circumstances, it provides accuracy up
to a few meters. A WiFi tag can cost
$40-50.
ZigBee is a mesh network protocol
designed to carry small data packets
over short distances using little power.
It is often used to connect devices
in a smart home, but lacks an overall
ecosystem. Few devices, other than
those built for smart homes,
use the standard.
Bluetooth was designed for short-
range communication. Bluetooth is
among the most energy efficient
technologies on the market. It has a
range of up to 100 meters. It is widely
adapted and has an established
ecosystem.
Ultra-wideband is used for
communicating large amounts of data
over the radio spectrum with very low
power. UWB can measure distance
with extreme accuracy but can be
highly expensive and has little existing
ecosystem.

Finding technological standards that cover a large range, working both up-close and far away, can radically improve interoperability and efficiency. The chart below de-
scribes some of the key properties of the most commonly used short-to-medium range wireless communication (10-100m) technologies.

Accuracy (m) Energy consumption Cost Data rate (Mbit/s) Encryption Ecosystem

Bluetooth 1-10 very low low 1-30 yes yes

UWB 0.1-0.4 high high 100-1000 yes no

Wi Fi 1-20 high medium 10-50 yes yes

ZigBee 2.5-5 low low 0.03-0.4 yes no

Compared to other solutions, Bluetooth offers particularly low consumption rates and costs. It is also easily integrated into other devices and benefits
from an existing ecosystem of several billion devices. These powerful advantages have made Bluetooth the key standard for the IoT revolution.

The introduction of Bluetooth
The introduction of Bluetooth
Bluetooth is a standard for wireless communication
between devices that was first developed in the 1990s to
provide an energy-efficient communication protocol over
short distances. It has traditionally been used in multimedia
applications, connecting smart devices to phones and
laptops. However, its recent evolutions have transformed it
into a powerful tool for IoT infrastructures.
There are more than 8.2 billion Bluetooth devices in the
world, making it the most widely adopted standard for
short range wireless communication. Nearly all of today’s
smart devices come pre-equipped with Bluetooth.
The introduction of Bluetooth low energy (BLE), further
spurred Bluetooth’s rise by offering high data speed
combined with extremely low energy consumption.
Bluetooth 5.0
According to Mark Powell, executive director at the
Bluetooth Special Interest Group, a non-profit organization
that oversees the development of Bluetooth standards,
“The enhancements in Bluetooth 5 and planned future
Bluetooth technical advancements mean that Bluetooth
will be in more than one-third of all installed IoT devices by
2020.”
8
Bluetooth-powered Beacons
Bluetooth can be found in a number of applications, but it
is particularly important to one cutting-edge technology:
beacons.
Bluetooth beacons are small wireless devices that transmit
a nearly continuous radio signal, usually a few times every
second. This signal tells smart devices the beacon’s ID
number. The number is then sent to a cloud server in order
to find the data related to that beacon.
What happens after that ID is received depends on the
particular situation. That information may simply be
recorded or run through another program to automate a
message or real-world action.
Due to the low-energy needs of Bluetooth, beacons are
able to run for several months or years on their original
batteries. Newer products in the space incorporate USB
charging and sensor-based energy saving to extend the life
of a fleet.
Bluetooth Low Energy (BLE)
Bluetooth low energy is a power-efficient version of
Bluetooth that was introduced in 2010. BLE allowed
developers to create small devices that can run for years on
tiny coin-cell batteries. The technology is at the core of the
Internet of Things revolution and is creating a powerful IoT
ecosystem. Bluetooth beacons are powered by BLE.
 9

The introduction to beacons

The beacon’s first step into the mainstream market began with the launch of Apple’s iBea-
con in 2013. This protocol allowed beacons to wake up apps and initiate actions on Apple
devices, allowing companies and retailers to interact with consumers.

iBeacon is currently supported by 90% of companies in the industry and Eddystone, though
launched only in 2015, by 45%. The support for AltBeacon is growing steadily but remains
relatively low at 12%.

Google then launched their own protocol, Eddystone, in 2015. iBeacon remains the most
commonly used standard, but companies are also drawn to the functionality of Eddystone.
On top of iBeacon and Eddystone, there is also a growing number of open-spec protocols
like AltBeacon.

Easy integration with handset devices has been essential for the growth of beacons in B2C
applications. However, the technology has far broader applications than just interaction
with mobile apps. In industrial settings, it offers a low cost, high capability infrastructure
and is beginning to replace existing forms of asset tracking technology.

Even though beacons are commonly used to track assets, they do not actually track anything
themselves. It is other devices that track beacons, using each beacon as a point of reference.

Apart from asset tracking, beacons can also be used for automating processes and, most im-
portantly, establishing a link between the physical and digital worlds. For this reason, they will
become infinitely more important in future business solutions
 10

III. Industry 4.0

means beacons
The IoT will enable infinitely more devices to communicate,
creating a network of items that are all connected, and Industry
4.0 will rely on the communication between these thousands
of moving parts. This communication must be seamless from
beginning to end. In order to make that happen, beacon
technology must be leveraged to build a bridge between the
physical and digital.

Bluetooth’s contribution to the IoT extends beyond the its own

functionality. Its emergence has been the force behind the
appearance of new hardware and innovative business models
that these tools make possible. It has empowered beacon
infrastructure solutions and continues to drive new beacon
applications.
 11

Industry development

Initial beacon use cases largely targeted B2C retail and mar-
keting. According to a report from beacon company directory
Proxbook, one third of the top 50 US retailers are planning major
beacon investments in 2016. Consequently, many beacon com-
panies are also focusing on retail.

According to ABI Research, 3.8 million BLE beacons were

shipped in 2015. Despite barely existing before 2013, the beacon
market is booming and is set to grow to an estimated 400 mil-
lion units shipped by 2021. Recent interest is only the beginning
of a much greater shift.

"
I don’t think this is the year of the beacon. I think it will be next year or even the
year after. It does not mean that nothing is going to happen. A lot of things are
going to happen. We are going to grow and grow, but it will not go Bananas.
We will go Bananas in 2017/2018.”
Steve Statler, industry expert and author of the Hitchhiker's Guide
to the BeaconSystem apps.
 12

Fragmentation

Of Proxbook companies polled, 59% identified as non-hardware

focused, up from 49% the preceding year. In fact, only 10% of
respondents described themselves as dedicated hardware com-
panies.

As beacon companies become more stable and offer a steady

stream of products, many new companies are turning to soft-
ware solutions, leaving hardware and infrastructure to a relatively
small group of companies.

This fragmentation is pivotal to the growth of the beacon. While

previous providers offered hardware, software, and installation
services, modern systems require more nuanced solutions. As
a result, providers are sticking to one or two certain areas and
making more advanced products.

The future of beacon technology requires reliable providers to

pull together expertise, software, and hardware, to deploy a fully
developed infrastructure.
 13

Current market

As specialization continues, the number of dedicated hardware

providers continues to grow. The largest suppliers of beacons are
Kontakt.io, Gimbal, and Estimote.

Polish startup beacon company Kontakt.io is known primarily

for high-performing and secure beacons with a long battery
life. Gimbal is known as one of the few providers to spin out
from a major hardware company (Qualcomm). Y Combinator
alum Estimote is known for their bright silicon beacons and is
now headquartered in Silicon Valley. Estimote, like Kontakt.io,
originally hails from Kraków, Poland, which is now affectionately
termed Beacon Valley.

There are also dozens of smaller companies getting on board.

The beacon industry is beginning to fill with a wide range of
beacon offers, but established vendors currently remain on top,
known for offering better support, expertise, and hardware than
their cheaper counterparts.
 14

IV. Beaconized industry

Big data, the Internet of Things, and even Industry 4.0 are easily
dismissed as empty catchphrases. However, actual changes and
numbers, not just predictions, have proven that connected en-
terprise is here to stay. Beacons are not only used to send push
notifications linking to discounts and special promotions. They
are used to automate tracking in real factories, to lead visitors
through museums and train stations, and to save money on utili-
ties. They generate rich data that would otherwise be difficult to
capture.

It is actual use cases and real world examples that prove the
beacon industry and the IoT is more than just hype.
 15

Beyond Beacons
Kontakt.io empowers businesses by bridging the gap between
real and digital. We are pushing the Internet of Things revolution
forward by connecting proximity-aware devices to the cloud.
Future IoT solutions will be built on beacons, and Kontakt.io is
proud to be a thriving leader in that space. We want to share
our best-in-class beacon infrastructure solutions and expertise
to empower every organization on the planet to realize its full
potential.