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

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.”

Skyhook and Google

The main thing you need to know here is that Skyhook is suing Google currently.

“Google recognized [the value of mapping the country’s Wi-Fi] and decided it wanted to have a similar system, so it copied the model,” says Morgan. “And because Google brings so much else to the table, where it’s giving away things for free [such as] maps and search and email, they became a competitor to us.”

The problem, Morgan says, came about after Skyhook won deals with Motorola and Samsung, and Google forced those companies to back out of their contracts. Google did not respond to a request for comment.

Even so, maps are undeniably a brilliant gem in Google’s crown--its turn-by-turn navigation is something that Android users universally adore. It only makes sense that the company would get involved in IPS services.

In November, Google announced that it was taking Google Maps indoors. Now, if you go to select U.S. shopping malls, airports, and retail locations, or certain Japanese transit stations, you can use your Android mobile device to see where you are. The idea is similar to the physical kiosk maps you see in malls, except this one is on your phone and adds Google’s famous little blue pin so that you can quickly figure out how to get from the shoe department in Macy’s, for example, over to the men’s department.

Google Maps 6.0 for Android updates your location as you move, and it will even refresh the map when you move to a different floor. It also labels all sorts of helpful information, such as bathroom locations, ATMs, and airport gates.

At launch, the application included floor plans for Tokyo's Narita and 17 U.S. airports; stores of the retail chains Bloomingdales, Home Depot, Ikea, and Macy's; and malls such as the Mall of America in Bloomington, Minnesota, Times Square Mall in Mt. Vernon, Illinois, and Liberty Fair Mall in Martinsville, Virginia.

To enable indoor mapping, Google created a desktop tool that lets venue owners and business owners upload the floor plans of their locations. After doing so, they download an app from Google Play that lets them share publicly broadcast GPS, cell-tower, and Wi-Fi information with Google. With that radio-signal information in hand, Google can allow Android users to track their indoor locations on its maps.

Currently Google isn’t pushing ads, discounts, or offers to consumers who use its IPS service. Since Google makes gobs of money on advertising, however, one can only imagine that we may very well see something like that at some point in the future.

As for whether the service profiles devices the way Skyhook does, Google’s new privacy policy doesn’t exactly say. It does state that the company keeps a consolidated record of how you use its services so that it can improve them as well as serve you more-relevant search results and ads.

Regarding location information specifically, Google’s privacy policy states: “When you use a location-enabled Google service, we may collect and process information about your actual location, like GPS signals sent by a mobile device. We may also use various technologies to determine location, such as sensor data from your device that may, for example, provide information on nearby Wi-Fi access points and cell towers.”

Next Page: IPS Offerings From Wifarer, Nokia, and Broadcom