So hot is the market for beacons in retail environments that Qualcomm has spun off its own platform into a standalone business unit based around its Gimbal technology.
The company has signed an agreement with a group of outside investors to turn its existing subsidiary, Qualcomm Retail Solutions, into an independent entity, controlled by the third party backers but with Qualcomm retaining a stake and being the technology provider. It will be named after its key asset, Gimbal.
The investors include a mixture of strategic and venture capitalist players, among them the i-Hatch LBS Fund, which has participants such as barcode/RFID specialist Zebra Technologies and AEG. Other investors were not named, and Qualcomm said its own stake remains a ‘substantial minority’.
The spin-off will give the new firm bigger resources to build a business around the Gimbal beacons, and greater freedom of action to develop that, even when it involves competing with important Qualcomm chip customers such as Apple with its iBeacons.
The chip giant has made moves like this before, with varying degrees of success ‘ for instance, with its Qualcomm Life health and fitness venture. The underlying aim is always to expand the reach of mobile connectivity and therefore of Qualcomm’s chips, as well as establishing new sources of patent licensing revenue. However, the retail move also reflects the firm’s increasing interest in technologies which fall well outside its traditional core markets, as it seeks to offset the decline in its IPR position in handsets (as CDMA-based technologies give way to LTE and royalty rates are reduced). This sees Qualcomm’s mighty R&D machine being focused on all kinds of surrounding markets in order to establish patent and product revenues in areas of potential growth such as the internet of things.
The use of proximity beacons to support applications such as personalized marketing, hyperlocal search and mobile payments is one of those growth segments, especially in retail outlets. Qualcomm entered the space only in December when it unveiled Gimbal, which uses low energy Bluetooth Smart to pinpoint users within one foot, whether indoors or outdoors. In line with Qualcomm’s strategy of building whole platforms around its hardware, as with AllJoyn, it also offers the Gimbal Manager back end software, and various applications.
Rocco Fabiano, president of Qualcomm Retail Solutions, said at the time: ‘Given the affordable pricing of the beacons, retailers and venue operators can install a network for customer engagement that is both more accurate and less expensive than other location-based systems.’
‘Enabling proximal, contextually relevant experiences is an important element of our vision to bridge the digital and physical worlds across retailing, advertising, social networking and other use cases, and Gimbal Inc. is well positioned to continue to drive industry leadership,” said Derek Aberle, Qualcomm’s president, in a statement about the formation of the new entity. “Qualcomm often serves as a catalyst for creating businesses and technology that enable new and unique user experiences.’
Gimbal was developed in-house as a context-aware proximity platform, supporting what its creator likes to call the ‘digital sixth sense’. It comes with a software developers’ kit for iOS and Android, enabling brands and retailers to create applications to lure their customers.
The past year or so has put a bright spotlight on indoor positioning and navigation. The majority of mobile data activity takes place inside, and service providers are keen to deliver services based on the location of those users ‘ whether targeted promotions in malls, augmented reality information about museum exhibits, or a host of other applications. However, GPS has poor indoor penetration and Wi-Fi is an incomplete solution, so there is a race to define new technologies and standards for micro-location.
Bluetooth is increasingly being adopted as the protocol of choice, since GPS is inaccurate when indoors, and NFC is less widely supported in handsets, and requires customer action, such as tapping a phone on a tag, to activate. As for the infrastructure, some options are small cell-based, such as ip.access’s recently announced Presence Cell, but beacons have grabbed many of the recent headlines, partly because of Apple’s enthusiasm (and the interesting applications it runs in its own stores), partly because of the low cost.
Gimbal beacons cost as little as $5 each in large quantities. There are two sensors on offer. The smaller Series 10 measures 28 x 40 x 5.6 millimeters while the Series 20 is 95 x 102 x 24 millimeters. Brands using the platform can send customized communications based on knowledge of the consumer’s interest, derived from geofence triggers and proximity triggers.
There are start-ups hurrying into the micro-location space too. Most recently, Estimote raised $3.1m in seed funding for its wireless beacon sensors, with backers including Eric Schmidt’s Innovation Endeavors, Betaworks and Bessemer Venture Partners. The start-up is piloting its technologies with large US and European retailers, it says.