Geomagnetic Technology
The technology is based on the fact that modern structures of steel and concrete have a magnetic profile, as they interact with the earth’s magnetic field. Using this magnetic profile and an app on a user’s smartphone, IndoorAtlas’s system can track where a user is within the building.
This requires first developing a reference “map” of the premises. The map is based on the local magnetic field data gathered from the premises. One of the features making the service easy to use is that the map can be compiled using software from the company, the IndoorAtlas MapCreator, a process that the company refers to as “fingerprinting” the magnetic profile.
Essentially, this fingerprinting can be done by persons walking through a mall or other structure with a smartphone, using the phone’s magnetometer (which drives the compass function) to collect the variations in the geomagnetic field. Using these readings, the map is then created by IndoorAtlas software and stored in the company’s cloud. The company claims a high degree of location accuracy for the system – within one-to-two meters.
Haverinen points out that various applications, whether it’s proximity marketing, wayfinding, search, or even social networking, can be built on top of the company’s platform, using its SDK. The company states that 25,000 developers are currently working on various apps – for both iOS and Android – for the IndoorAtlas platform.
Use Cases for Geomagnetic Location
Some of the use cases for the IndoorAtlas technology are generic, and can be provided by beacons, as well, for example. Others, however, are unique to the geomagnetic system.
Among the interesting, added capabilities that IndoorAtlas offers are: Tracking – the ability to track the individual’s movement throughout the venue. This is done using a “blue dot” that moves across the screen with the person’s movements. This also leads to a “multi-dot” capability – being able to track a group of users. As the company states, “This is great for social networking and team navigation as multiple devices can be located in real-time when using a mobile app.”
Among the other key use cases are: Wayfinding and Navigation; Search (within a location); and Proximity Marketing (directing specific offers or information to consumers) – a common function of other systems, such as beacons, as well.
Among vertically-oriented use cases, Haverinen pointed out several, some of which he noted were longer term opportunities. Applications included:
- Package Delivery (e.g. within a mall)
- Asset Tracking (including within an industrial setting)
- Airport Guidance (directions and information about services)
- Uber/Passenger Location (where individual is coming from in an airport)
- Healthcare (asset tracking and directions)
- IoT-related (longer term)
- Public Safety (911 related, location of a person in a building, longer term)
Regarding geographical aspects of market opportunities, Haverinen stated that he felt Asia was moving ahead most strongly on location-based in-premise technology implementation.
The Market – Beacons & Other Approaches
While the geomagnetic approach can avoid costs associated with other in-premises location technologies, there are obviously going to be areas of overlap and interaction. Haverinen emphasizes that the IndoorAtlas IPS (indoor positioning system) can integrate input from these other location systems.
We have been tracking the growing penetration of beacons, for example. (See: “Unacast’s Bold Vision – Unlocking the True Power of Beacons,” MCE, 7/11/16.) In addition, guest WiFi is already present in many establishments.
IndoorAtlas sponsored a study (by Vanson Bourne) that found while 38% of respondents had already implemented some sort of IPS system, virtually all respondents were planning to do so. For systems in operation, the survey found WiFi to be the leading technology with 47% penetration, followed by beacons, 26% and geomagnetic, 17%. The study pointed out that a slightly higher number of organizations were preparing to pilot geomagnetic systems, than were going to pilot the other technologies.
An obvious important consideration for any system that relies on wireless transmission, whether beacons or WiFi, is the number of devices that need to be installed to adequately cover the premises. The survey findings, summarized in the table, were that, across all respondents there were an average of 53 venues to be covered per company and that the estimate was that 324 wireless devices would be required per venue – meaning that a given company, on average, would have to consider installing over 17,000 devices in its properties.
For retailers, on average, these numbers mushroomed to 83 venues per company and a requirement of 482 devices to cover the average venue, resulting in a company-wide potential requirement for 40,000 devices.
| Category | Avg Devices/Venue | Total Venues/Co. | Avg Total Devices |
|---|---|---|---|
| All Respondents | 324 | 53 | 17,190 |
| Retailers | 482 | 83 | 40,000 |
Regarding the relative advantage of installing a geomagnetic system, we asked about issues arising from changes in the magnetic profile of a venue. Large items might be moved around – walls, heavy equipment, partitions or other objects, for example. Haverinen states that it would be necessary from time to time to update the magnetic profile if significant changes occur within the building. The company also states that it can update the geomagnetic map if it receives data from sensors in the building, which are streaming to its cloud. Haverinen also points out that the underlying profile created by the building’s structure typically does not change.
“Mappers” as Business Partners – Baidu, Yahoo! Japan
Haverinen gave us a view of the company’s strategy as a combination of: exploring and developing use cases; creating greater overall awareness of the technology; and working with major companies, who he characterizes generally as “mappers” to gain broad exposure to consumers.
The mappers include the likes of major search engine companies who are in a race to provide the most advanced map features. Perhaps the most significant breakthrough for the company was a major deal consummated with Chinese search engine powerhouse, Baidu.
In 2014 Baidu invested $10 million in IndoorAtlas, and Baidu was granted exclusive rights to Indoor Atlas technology in China. Baidu has been using the geomagnetic technology to offer search and way-finding capabilities for their maps and plan to also offer proximity marketing services.
Another big win in early 2016 was Yahoo! Japan. In June Yahoo announced that is was providing via its Maps app on Android phones location services for three of Tokyo’s large train stations using IndoorAtlas technology. It labeled this, “the first successful use case of geomagnetic technology in Japan.”
Location-Based Services for Retail
Location-based technologies have become strongly identified with proximity marketing, e.g., use of beacons within retail locations to connect with customers for purpose of in-store discounts or other offers, directions, or other immediate assistance. Haverinen views retail as a fairly difficult market for location-based technology at the present time. “Retailers think of location technology and proximity marketing as a cost item,” he states.
He points out that retail is going through a difficult transition, facing the wild growth of ecommerce. He also observes that very few retailers are able to develop apps that achieve a steady level of engagement with consumers, stating, “We haven’t seen a large number of big wins for proximity marketing systems in retail.”
“Retailers, however, have a great deal of very valuable information in their databases,” he adds. He believes that breakthroughs in retail will come from involving brands and other players who want to reach consumers in-store. “Facebook and Google, for example, want to reach these consumers.”
Haverinen believes that geomagnetics could hold an answer for retailers, since it relieves them of the difficult steps of positioning hardware systems, such as beacons in their stores and also eliminates that cost factor.
Business Model
The company started by developing its geomagnetic location technology. They have essential patents and 30 patent applications pending, as well as the opportunity to file for many more patents.
When we asked whether they felt that they could rely on having a defensible technology position, Haverinen explained broader aspects of their business model.
First he told us that they were not relying primarily on patentable IP, but rather more so on their ability to continuously innovate. Furthermore, their business model is based heavily on their cloud platform.
As he put it, “There are various competitors out there, including some using magnetic location technology, but our differentiator is our cloud-based platform, which is readily expandable horizontally and on which value added apps can be built.”
The company publishes a detailed price list, which is based on the number of unique users per month that the customer has. It is a freemium offering, with under 100 users per month being free. Prices range from $100 per month (100-1000 users) up to $11,000 per month (101,000-500,000 users.)
The company has under 50 people. Based in Finland, they have a small commercial team in the U.S. and support engineers in Japan for their Asia-based clients.
Our Take
It appears that the validity of the technology has been established. Although the elimination of the need for added in-premises infrastructure lowers the cost of entry, there still remains the critical issue for the customer, which is the economics of the use case.
We believe that IndoorAtlas has the opportunity to capture an increasing share of the venue-based location and tracking market. While this may cut into the share for beacons and WiFi, we believe that there will continue to be use cases where beacons, for example, can be used effectively. One of these is the area of mobile payments, where checkout areas can be easily equipped with beacons that integrate with mobile payment apps.
Over time, we would expect to see emergence of companies that provide a range of location-based solutions. IndoorAtlas is very early in its development, but certainly has the opportunity to be one of these, although, as with a range of mobile cloud solution providers, acquisition by one of the titans – Google, Facebook, Apple, Amazon, Microsoft – can never be discounted.
Visit their website: www.indooratlas.com