Bluetooth low energy can be used for smart homes, retail geofencing and mobile payments -- if privacy and security issues are addressed.
1. It's gaining momentum. As the name suggests, Bluetooth low energy (BLE) technology, also known as Bluetooth Smart or Bluetooth 4.0, uses less energy than standard Bluetooth wireless communications. BLE could be used for home automation, wireless medical devices, exercise sensors, retail geofencing and mobile payments. Apple calls its BLE offering iBeacon, which is available on newer models of the iPhone.
2. Retailers will be early adopters. BLE could be superior to other location-based technologies for smartphones because it's more targeted. For example, with BLE, a store can detect which department you are standing in and send you a relevant offer. Macy's is testing this idea with iBeacons and an app called Shopkick.
Heritage Auctions is planning to test iBeacons for large-scale auctions to speed up registration and alert VIP customers to big-ticket items that might interest them. Apple is using iBeacon in its retail stores to push messages about phone upgrades or the status of your computer repair.
3. It could boost mobile payments.Hands-free payments aren't popular yet, but BLE could change that. PayPal is rolling out its Beacon BLE technology this year so customers can use the PayPal app to pay, verify the transaction with voice recognition, and get an emailed receipt--all hands-free.
"Bluetooth mobile payments are still in the early stages," says Gartner analyst Mark Hung. He says mobile payments will require greater security than previous Bluetooth applications did.
Ã'Â 4. It can put your whole house online. Already there are mobile apps that let you lock your doors, turn off your lights and adjust your thermostat. BLE would make these actions even easier; the thermostat could be automatically adjusted as you walk out the door for work, for example.
With BLE, "Companies make their products more useful and get better information about what customers want," says Jonathan Collins, an analyst at ABI Research. "But it does change the relationship with the customer." Collins says companies will know how customers use their product and whether it needs servicing because the product is connected to the Internet or a mobile app.
5. Smartphones will be even less private. "It's up to marketers and app developers to make this not intrusive so users become more accepting," says Hung. "If they design it correctly, I think it can take off."
Customers can opt in or out of BLE apps, but companies should be very clear about when customers' devices are in BLE zones and when they will be sent notifications.
Read more about bluetooth in CIO's Bluetooth Drilldown.