A new feature called iBeacon, from Apple, is currently causing waves in the industry with fears that it could kill off NFC (near-field communications), the wireless technology associated with mobile payments. iBeacon, introduced as a feature of Apple’s iOS 7, uses Bluetooth Low Energy(BLE) to create beacons (small wireless sensors) that alert mobile phone apps when users enter them.

For example, you’re shopping in your favourite store and you walk into an iBeacon zone, in response your smartphone will automatically receive customised messaging such as special offers and directions to the aisle where the special offer product can be found. iBeacons even allow you to pay for your shopping using your smart phone, and  as a result alarm bells are ringing for NFC technology suppliers.

The reason iBeacon is such a threat to NFC technology comes down to its range. Although iBeacons are a bit expensive in comparison, the range massively surpasses that of NFC which only works in close proximity. So, where as NFCs range is up to 20cm (with the optimal range being less than 4cm), iBeacons range is up to 50 meters. What’s more, for NFC communications to work an NFC chip needs to be in the mobile device and in reality not all phones have this, but almost all have Bluetooth capability. Plus, because the range is so vast stores don’t need to purchase as many iBeacons as they would NFC tags.

Follow up commentary has seen a different insight from Einar Rosenberg, chief technology officer for Narian Technologies, who after testing BLE technology on Android and iOS devices and sees NFC and BLE as complementary technologies.

“Let’s say you’re in a mall,” he said. “GPS tells you you’re in a mall. Wi-Fi positioning tells you what store you’re at. Bluetooth can tell you you’re looking at the jeans section. NFC tells you about the specific pair of jeans.”

The question on the industries lips now is, will Apple, which has avoided NFC and instead looked at alternatives using wi-fi and Bluetooth, use iBeacon as its doorway to mobile payments. In reference to how NFC phones need to be very close to transfer the data, Apple’s mobile development chief Craig Federighi said, “There’s no need to wander around the room, bumping your phone. Apple has found a smart way to wirelessly transmit data over short distances using BLE. So why do you need to bump your phone with another? Why do you need NFC if you could share the data with anyone in the region with the existing bluetooth technology?”

Rosenberg adds, “If Apple plays its iBeacon cards right, it could even turn out to be the best-kept secret superpower of iOS 7 and the iPhone 5S. All sorts of payments systems and LBS facilities could be created — the most interesting of which we probably can’t imagine right now.”

http://www.retailcustomerexperience.com/article/219567/Is-iBeacon-the-answer-to-payments-and-indoor-mapping?rc_id=421 and http://gigaom.com/2013/09/10/with-ibeacon-apple-is-going-to-dump-on-nfc-and-embrace-the-internet-of-things/