A beacon, in the context of location-based services, is a small hardware device that enables data transmission to mobile devices within a specific range of the device. For most applications, recipients must have Bluetooth turned on, have the associated mobile app installed with location services enabled and must have opted in to accept the sender's transmissions.
Beacons are usually small standalone devices that are attached to walls or objects in the environment. The simplest beacons simply send out a signal to devices in range but they may also be Wi-Fi- and cloud-connected and can contain memory, processing resources and sensors for temperature and motion detection (among other possibilities). A typical configuration might include an ARM processor, a Nordic Semiconductor or Texas Instruments chipset, a Bluetooth Low Energy (BLE) module and a battery. The devices are low-power and inexpensive, with a battery life of several years.
Beacons are often said to work like lighthouses, sending out an intermittent signal that can be detected by an entity within range. Instead of the light signals that guide ships, however, the beacon emits a radio signal that can be picked up by nearby mobile devices equipped with the associated app. As Google developers commented at the release for the company's Eddystone beacon profile, "Just like lighthouses have helped sailors navigate the world for thousands of years, electronic beacons can be used to provide precise location and contextual cues within apps to help you navigate the world."
Google's Eddystone and Apple's iBeacon are the two most commonly implemented beacon protocols. Here's a brief explanation of how iBeacon works. Any hardware device that supports Bluetooth 4.0 can, in theory, become a beacon in an iBeacon network, which means that smartphones, PCs and tablets can function as beacons. The beacon continuously scans for iOS-based mobile devices that have Bluetooth open and are running the associated mobile app. When the beacon detects such a device, it sends a connection request to wake up the app. Information within the request includes the information required to push the desired communication to the device in real time.
Beacons are increasingly implemented in retail environments, where they are used to streamline mobile payment systems and enable proximity marketing: the wireless delivery of promotional material to mobile users within range. The location may be so precise that the communications target a shopper standing in front of a particular product with coupon offers, flash sales and suggestions for related products -- among many other possibilities.
Beacon technology has many other applications. The same precision of targeting that finds consumers can enable communications directed to someone in a particular seat at a stadium or standing in front of a museum installation or an artwork in a gallery. The technology can provide users with directions or maps to airport locations such as gates, ticket counters, shops and restaurants, as well as identifying the closest elevators, restrooms and courtesy phones. Similar apps can help guide people in other large facilities, such as hospitals and help them find their cars when they leave those locations.