Privacy Challenges in the Smart Tag Market

Born as a solution for people who frequently lose track of things, the Bluetooth smart tracker market is quickly growing and rising in consumer popularity and awareness.

In 2013, Tile raised a record-breaking $2.6 million to become the most successful campaign ever at the time on the crowdsourcing platform Selfstarter, proving that there was a need for personal item tracking over and above what competitors were offering. Tile’s advantage and major innovation was that it was the first to make a device that leverages the entire base of mobile devices with the Tile app installed as a network to find items, expanding the 100-ft range limitation of Bluetooth so users could locate items faster and more easily.

Smaller players making Bluetooth trackers such as Chipolo and Pebblebee also crowdsourced funding around the same time as Tile (2013 and 2014, respectively), but did so on Kickstarter instead, ultimately raising less money and gaining less brand awareness than Tile. Once Tile proved there was a market for these devices, tech giants Apple and Samsung began developing their own line of Bluetooth trackers in 2021, with Apple now the current market leader. Apple’s entry has been the most significant validation of this market for consumers.

Now with the proliferation of smartphones, Bluetooth smart trackers are categorized as smartphone accessories, working within or alongside various smartphone manufacturer ecosystems to streamline the search process when valuable personal property goes missing.?

The smart tag market is growing, but still has a lot of potential ahead.?Currently, less than 10% of US Internet Households report owning at least one smart tag, according to Parks Associates research study: Smart Tags, Personal Trackers, and Asset Protection.

Smart tags are an easy, portable, and relatively inexpensive solution to a common consumer need – to find things. Parks Associates research shows 23% of households reporting an intention to purchase smart tags in the next six months, and more than half agreeing that using smart tags is an excellent way to find lost items, the outlook for the smart tag market looks positive.

Consumers are interested in smart tags and see value in their originally intended use – to efficiently locate misplaced items. Apple, though a recent entrant to this space, is the current market leader.

Unexpectedly, however, 32% of respondents admitted to using this technology to track another person without their knowledge, which has potentially dangerous implications for public safety. Companies making smart tags need to be aware of how consumers are inevitably using their products – intended or not – and work to provide the best and safest solution going forward for the general public.

Since the debut of Apple's AirTags, news stories have surfaced detailing situations where both men and women are the subjects of stalking, validating this point of people tracking others without their knowledge. In more extreme cases people are using smart tags to track down the location of another person without their knowledge, and at least one case was linked with a death. While Apple's AirTags make headlines most often, theoretically all smart tags can be used in a similarly nefarious fashion. Apple, Tile, and Samsung currently offer their own solutions to unwanted tracking, but many smaller smart tag manufacturers do not currently offer clear guidance or features to obstruct unauthorized tracking.

• Apple’s privacy/safety feature relies on the ability of its “Find My” network to proactively notify someone when an unknown AirTag is traveling with them. In April 2021, Apple opened its "Find My" network to third-party manufacturers. This allowed, for instance, the Chipolo Spot trackers to be integrated into the Find My app and use the integrated features (such as with proactive alerts). Unfortunately, Find My network functionality is integrated at the operating system level in iOS and iPadOS and is thus only available for AirTag. If an unknown AirTag is detected traveling with the user for about 8-24 hours iPhone users will receive a notification. If the targeted individual does not have an iPhone the AirTag will begin playing sounds after the same amount of time. Apple also released the Tracker Detect app on Android so users can reactively scan for unwanted trackers on their person.
• Android users can choose the Tile app's Scan and Secure feature, or those with a Samsung Galaxy smart phone can use the Unknown Tag Search using SmartThings Find. However, both options are reactive – meaning users must actively scan for unknown trackers separately (meaning on each of the respective apps) and regularly for people to know if another person is trying to track them. Further, a complete scan on these reactive services (i.e., Tracker Detect, Scan and Secure, Unknown Tag Search) takes about 10-minutes and users may need to travel some distance during the scan to effectively use the service, making it somewhat of a hassle.

Tech giants like Apple and Samsung collectively have the power and resources to drive the discussion around how to best handle bad actors in relation to their own smart tag products. However, large and small alike may be beginning to bolster legal teams in order to effectively handle cases relating to crime as this pattern potentially becomes more prevalent. Even prospective entrants and cross-collaborators previously looking to enter this market may be holding back as more stories circulate. Media outlets circulating instances of misuse among smart tag owners is potentially creating a fear among consumers and impeding growth within the smart tag market. Of course, those who choose not to purchase a smart tag can still be tracked without their knowledge, but as news stories continue to circulate, a negative stigma may begin to take hold around this technology.

While smart tag adoption is not as pervasive as other consumer electronic devices on the market, 86% of households own a smartphone according to our ongoing consumer data. This points towards wide room for growth within the category because households with smart tags also need to own a smartphone. Further, 75% of households own a laptop, 64% own a tablet, 38% own wireless earbuds, and 87% own a television which likely has a remote control.

All of these devices are already widely prevalent within US Internet households and all of these devices can benefit from having a smart tag attached. Communicating to these consumers about the potential added value of using smart tags, is essential to growing the opportunity for manufacturers.

This is an excerpt from Parks Associates study, Smart Tags, Personal Trackers, and Asset Protection. This Smart Product Market Assessment identifies key and emerging players in the Bluetooth / wireless tracker (i.e., smart tag) market.

Other topics include use cases, adoption trends, new developments in smart tag technology, key and emerging competitors, a comparison of features offered by these players, barriers to adoption, and consumer security and privacy concerns.

Key Questions Answered:

• What is the outlook for smart tag adoption over the next five years?
• What are the major trends currently impacting the smart tag market?
• What use cases and functionality are driving consumer adoption of these devices?
• How is consumer safety and privacy concerns being addressed within various smart tag devices??

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