Big Brother or Good Business?

Privacy fans, take note: A new technology, called Indoor Positioning System, could push your worry meter to the max. IPS allows pinpoint tracking of any Wi-Fi-enabled device, such as a smartphone or tablet, within a building. This means that an IPS service could easily track you--right down to, say, the table you’re occupying in a mall’s food court--as long as your mobile devices’ Wi-Fi is turned on. And, if you’re a typical device user, your Wi-Fi is always on, right?

In short, we've moved far beyond using regular old GPS for location tracking. Indoor environments are challenging for low-cost location systems such as GPS, because the ways in which buildings are constructed--not to mention physical obstacles and even people’s bodies--interfere with GPS's ability to pinpoint a location.

One example of the new technology is the Navizon Indoor Triangulation Service, which MIT’s Technology Review blog discussed recently. Location services company Navizon says that ITS can provide accurate tracking of Wi-Fi-enabled devices, including smartphones, tablets, and laptops, anywhere inside a building or throughout a campus. (Triangulation by Wi-Fi hotspots helps to make location services more accurate.)

As such services begin to grow, they might threaten your privacy. So, in many instances, if you don’t want an entity knowing the location of your mobile device, you should shut it off or ditch it completely.

At the same time, however, device tracking could become hugely useful to you. Innovators have figured out how to take GPS-like navigation indoors so that people can not only quickly find the restroom in a department store or their departure gate at the airport, but also receive deals and discounts from retailers upon stepping over a shop's threshold.

Navizon wouldn’t comment for this article, but some of its competitors did. Let’s take a look at other companies working on IPS services.

Skyhook developed the first hybrid location system to use Wi-Fi positioning, GPS, and cell-tower triangulation to determine the coordinates of a device, even indoors. Since then, Apple (Skyhook’s biggest customer) and Google (Skyhook’s biggest competitor) have emulated the hybrid approach for their respective mapping apps.

All sorts of mobile devices on the market--phones, laptops, ebook readers, digital cameras, and gaming devices--are location aware. In many cases, that’s because Skyhook software is baked into them.

For instance, Apple, Dell, and HP laptops use the Skyhook system to change their clocks automatically when users take them across time zones. The laptops also let users pull up real-time information about what’s happening in a neighborhood that they happen to be in, and they can broadcast their location so that users can find them in case of theft.

But what’s really interesting about Skyhook is its ability to profile individual devices--not identifiable people, as CEO Ted Morgan is quick to point out--and know which ones are associated with certain kinds of people. For instance, if Skyhook sees that a device shows up at Wrigley Field four times in a season, it assumes that the person using the laptop is a sports fan. Or if a laptop or smartphone is detected in an airport several times a month, Skyhook guesses that the user is most likely a business traveler.

“Because we’ve been running the location on about 100 million devices for the last four or five years, we have a tremendous amount of knowledge into overall human behavior--about where people are throughout the day, where they go, which street corners are busy, which ones are not at different times of the day,” Morgan says.

Over time, Skyhook also figures out where all these devices live. Then, by mixing into device profiles publicly available data from the U.S. Census, for example, it adds demographic data such as age and ethnicity.

This is a veritable gold mine of data that Skyhook can then package and offer to marketers who want to reach only select segments of consumers, or to developers and device makers who can use the software to deliver highly relevant real-time content to users.

“We’re able to see at an aggregate level what 100,000,000 people are doing, so we can predict what areas of a city are getting busy or less busy, what types of people are in different areas of the city,” Morgan says. “So, if you want to know where to go out in Seattle tonight, I can tell you what the most active street corner is going to be, and I can tell you the high-level breakout of the type of people who will be there, because they’ve done that every Friday night for the last three years.”

So just how does Skyhook do all this profiling of individual devices while maintaining the anonymity of the people using them?

Morgan says that the company does not use device MAC addresses or phone numbers.

“Every time a new phone registers on our system, we give it an ID like a license plate. There’s no way for you to know what it is. There’s no way for anyone to see it. If you were able to look into our system and see what my phone’s ID was, the only thing you’d ever find out about me is that I’m a middle-aged white guy who makes over $100,000,” Morgan says. “It would never say my name. It would never say where I’m from. There’s nothing that could ever figure out the user, and that’s the bar we have for privacy. Nobody could get into our system, even ourselves, to figure out the name of a user.”