iBeacon in a single sentence is a technology that enables an iOS device or other hardware to send push notifications to iOS devices within close proximity using BLE (Bluetooth Low Energy).
Apple’s iBeacon works on Bluetooth Low Energy (BLE), also known as Bluetooth 4.0 or Bluetooth Smart. In a real life scenario it would be more of a location-aware, context-aware, pervasive small wireless sensor beacon which could pinpoint your location in a store. From there iBeacons could send you personal notifications of items around you that are on sale or items you may be looking for. It could enable payments at the point of Sale (POS) such that you don’t need to remove your wallet or card to make a payment. It could be a possible Near Field Communication (NFC) competitor.
It works by using Bluetooth Low Energy Proximity sensing to transmit a Universally unique identifier which when picked up by a compatible app or operating system can be turned into a physical location or trigger a specific action on the device such as a Check-in on social media.
Since BLE is a low energy technology it may face lot of challenges, such as data transmission rate, streaming might not be possible, security still remains an unclear subject, how would it manage broadcasting offers information on mass scale when in-store traffic is at its peak.
The beacons themselves come in a number of different formats, including small coin cell powered devices, USB sticks and software versions.